Rule on Microbial Products of Biotechnology: Summary of the Public's Comments and the Agency's Response

Rule on Microbial Products of Biotechnology: Summary of the Public's Comments and the Agency's Response

MICROBIAL PRODUCTS OF BIOTECHNOLOGY

FINAL REGULATION UNDER THE TOXIC SUBSTANCES
CONTROL ACT

A SUMMARY OF THE PUBLIC'S COMMENTS

AND THE AGENCY'S RESPONSE

US Environmental Protection Agency

March 26, 1997

MICROBIAL PRODUCTS OF BIOTECHNOLOGY FINAL REGULATION UNDER THE
TOXIC SUBSTANCES CONTROL ACT

A SUMMARY OF THE PUBLIC'S COMMENTS AND THE AGENCY'S RESPONSE

The Environmental Protection Agency (EPA) issued a proposal in
the September 1, 1994 FEDERAL REGISTER to add to Title 40 of the
Code of Federal Regulations (CFR) a Part 725, Reporting Requirements
and Review Processes for Microorganisms. This proposal also revised
40 CFR Parts 700, 720, 721, and 723. The addition of part 725 would
establish a screening system specifically designed for new microorganisms
under TSCA 5. The revisions to part 700 added fee requirements specifically
for microorganism submissions under TSCA 5. The proposed revisions
to parts 720, 721, and 723 made reference to the new part 725 as
containing the requirements for microorganisms subject to TSCA 5.

In response to the proposal, EPA received 40 letters from the public
during the comment period. The Microbial Products of Biotechnology
Proposal docket (OPPTS-00049C) contains the proposal, materials
supporting the proposal, public comments on the proposal, material
EPA has added in reply to the public comments, and the Regulatory
Impact Analyses for the proposed and the final rules.

After a careful review and analysis of the comments and data in
the record, EPA is revising 40 CFR Parts 700, 720, 721, and 723,
and adding part 725.

This document summarizes the public's comments on the proposed
rule and presents EPA's response.

As an aid to the reader, the following is an outline of the contents
of this document:

I. GENERAL COMMENTS ON PROPOSED RULE

I. STATUTORY FRAMEWORK - COVERAGE UNDER TSCA

A. Applicability of TSCA to Microorganisms

B. Applicability of TSCA to Plants and Animals

C. General Types of Products Subject to TSCA

1. Clarification of TSCA oversight

2. Coverage of pesticide intermediates

D. Scope

1. Retention of "intergeneric" interpretation

2. Clarification regarding taxonomy

3. Modifications to scope

4. Alternative approaches to scope

III. REPORTING GENERAL COMMERCIAL USE OF MICROORGANISMS

A. MCAN Process

1. General comments

2. Contract manufacturing

3. Information requirements

4. Byproducts

B. SNUR

C. Tiered Exemption

1. General comments

a. Administrative issues

b. Alternative approaches

2. Recipient microorganisms

a. Criteria for eligibility

b. Amending list of candidates

3. Introduced DNA

a. Limited in size

b. Well characterized

c. Poorly mobilizable

d. Free of toxin sequences

4. Containment

a. Limited entry requirement

b. Inactivation requirements

IV. REPORTING R&D ACTIVITIES FOR TSCA MICROORGANISMS

A. TSCA Jurisdiction

B. Research for Commercial Purposes

C. Microorganisms Eligible for Small Quantities Exemption

1. EPA's authority under TSCA 5(h)(3)

2. Use of research microorganisms in commerce

3. Use of genetic libraries

D. R&D in Contained Structures Subject to TSCA and Another
Federal Agency

E. Requirements for Small Quantities/Contained R&D Exemption

1. Clarify use of NIH Guidelines

2. Clarify containment requirement

F. Exemptions from TERA Reporting for Released R&D

1. Exemptions for certain nitrogen-fixing bacteria

2. Federal agency RD subject to TERA reporting

G. TERA Reporting Process

H. Options for Oversight of R&D Activities

1. General comments

2. Alternative for low risk field tests

V. OTHER ISSUES

A. Microorganism - Definition

B. TSCA Inventory

1. Culture collection

2. Inventory listing

3. "Grandfather" period for microorganisms

4. Microorganisms currently listed on the Inventory

C. Confidential Business Information

D. TSCA 8(e)

E. Antibiotic Resistance Markers

F. State Coordination

G. Regulatory Decision

H. Economic Impact

VI. APPENDIX

A. Public Commenters

B. References

I. GENERAL COMMENTS ON PROPOSED RULE

The proposed rule described implementation of EPA's program for
regulation of microorganisms under TSCA 5. In 1986 as part of the
Office of Science and Technology Policy's "Coordinated Framework
for Regulation of Biotechnology," EPA issued a policy statement
which provided EPA's plans and rationale for addressing microbial
products of biotechnology subject to TSCA ("1986 Policy Statement")
(51 FR 23313, June 26, 1986). EPA was able to implement part of
its TSCA microorganism program with the publication of the 1986
Policy Statement. However, to fully implement its TSCA program,
additional rulemaking was necessary. The 1994 proposed rule was
intended to provide the additional regulations needed to fully implement
the TSCA 5 program for microorganisms.

Since 1986, EPA has been reviewing notices on new microorganisms
under TSCA 5 using the procedures already in place for traditional
chemicals. Under TSCA 5, EPA must receive premanufacture notices
(PMNs) prior to the introduction of new chemical substances into
commerce. Microorganisms are considered "chemical substances" subject
to TSCA. The 1994 proposed rule was intended to incorporate many
of the procedures in the existing TSCA 5 program for traditional
chemicals with modifications, as appropriate, to address the specific
characteristics of microorganisms. Additionally, the 1994 proposed
rule contained exemptions for specific microorganisms under certain
conditions of use based on EPA's experience reviewing notices for
microorganisms under the 1986 Policy Statement.

EPA proposed to retain the 1986 Policy Statement interpretation
of intergeneric microorganisms as "new microorganisms." Intergeneric
microorganisms are those formed by combining genetic material from
organisms in different taxonomic genera. The 1994 proposed rule
also incorporated the existing requirement that persons intending
to manufacture (including import) or process new microorganisms
for commercial purposes in the U.S. submit a notice to EPA at least
90 days before such manufacture or processing. EPA would have 90
days to review the submission to determine whether the intergeneric
microorganism may present an unreasonable risk to human health or
the environment. To distinguish between notices for traditional
chemicals and microorganisms, the microorganism notice was renamed
the Microbial Commercial Activity Notice or MCAN. The proposal also
contained an exemption from MCAN requirements for certain listed
microorganisms when they are produced in compliance with the specified
exemption criteria.

At the research and development (R&D) stage, EPA proposed to
exempt intergeneric microorganisms from TSCA 5 reporting when they
are tested in contained structures such as laboratories and greenhouses
when certain requirements are met. In an effort to avoid duplicative
Federal regulatory requirements, EPA also proposed to exempt from
oversight those R&D activities which are conducted in contained
structures and are subject to the joint jurisdiction of EPA and
another Federal agency.

For commercial R&D activities involving intentional testing
in the environment, the proposal included a requirement to submit
a TSCA Experimental Release Application (TERA) to EPA at least 60
days before initiating such testing. EPA would have 60 days to review
the submission and determine whether the proposed testing will not
present an unreasonable risk to human health or the environment.
This abbreviated reporting process was designed as an exemption
from the full 90-day MCAN reporting process for microorganisms ready
for commercialization. The proposal also contained an exemption
from TERA reporting for certain listed microorganisms when they
are tested in the environment under specific conditions.

Comments:

EPA received 40 comments on the proposed TSCA biotechnology rule.
A list of the commenters and the corresponding numbers used for
reference in this document may be found in Unit VI.A. One commenter
was inadvertently given two separate numbers (#6 and 19; 19 is not
used for reference). Three of the 40 comments (#1, 3, 10) were strictly
requests for extensions of the rule comment period. EPA did extend
the comment period for an extra 60 days beyond the original 60-day
comment period. The other 36 commenters had raised issues about
specific aspects of the rule. Nevertheless, 15 of the 36 commenters
(#12, 15, 30, 8, 18, 22, 24, 35, 34, 25, 23, 26, 39, 32, 36) also
indicated that they generally supported the rule. Eight of the 36
commenters (#13, 2, 5, 6, 14, 20, 9, 16) had major concerns about
the rule and requested modifications that would significantly change
the nature of the rule as proposed.

Of the 15 commenters expressing general support for the rule, six
(#8, 18, 23, 25, 26, 30) specifically indicated that they believed
it to be a significant improvement over the current system. Two
commenters (#12, 25) were pleased that EPA had been responsive to
their comments on earlier drafts of the proposal which had been
made available to the public. Three commenters (#8, 18, 25) expressed
support for the "flexible and multistage process" which established
a special R&D reporting program and other appropriate exemptions
from full reporting. Two commenters (#12, 35) urged EPA to promulgate
a final rule as quickly as possible.

Of the eight commenters expressing major concerns about the proposed
rule, one (#13), while indicating support for a formal regulatory
program, stated that "the Agency has not adequately justified the
focus of the regulations solely upon microorganisms which are produced
through genetic engineering processes" and recommended that "the
Agency reevaluate its policy within the context of a more scientific
risk-based approach to the regulation of microorganisms."

The other seven commenters (#2, 5, 6, 9, 14, 16, and 20) who raised
major concerns about the proposal supported greater regulatory restrictions
on intergeneric microorganisms, particularly those released to the
environment. For example, these commenters opposed exemptions from
review for any microorganisms prior to introduction into the environment
(#2, 5, 6, 14, and 20), and objected to "blanket exemptions based
on parent organism safety...." (#16).

EPA response:

EPA is promulgating final regulations which contain relatively
few changes from the 1994 proposal. The specific changes and EPA's
responses to commenters' recommendations are discussed in detail
in the appropriate sections of this document. EPA believes that
the proposed rule represents a significant improvement over the
program it has been operating under the 1986 Policy Statement. These
regulations are modelled after and incorporate many of the procedures
in the existing TSCA 5 program for traditional chemical substances
that EPA has operated for the past decade, modified as appropriate
to address the specific characteristics of microorganisms.

Section 5(h)(4) allows EPA to exempt new substances from all or
part of 5 reporting requirements, if EPA determines, by rule, that
such substances will not present an unreasonable risk. EPA has used
5(h)(4) to exempt certain categories of microorganisms from review
as new microorganisms. These exemptions have been developed after
careful review of the available scientific information and microorganism
premanufacture notices (PMNs) submitted under TSCA 5, as well as
consideration of public comments and the advice of EPA's Biotechnology
Science Advisory Committee (BSAC).

EPA believes that it has provided adequate justification for the
program that it has developed. A diverse group of microorganisms
could potentially be subject to TSCA. In general, EPA has created
a flexible process which will allow for further refinement as EPA
gains additional experience reviewing intergeneric microorganisms
that are subject to TSCA 5 oversight.

Many of the provisions of the final rule, and specifically the
exemptions, are based on experience EPA has gained during its reviews
of submissions for TSCA uses of intergeneric microorganisms since
1986. EPA believes that the regulations it has developed for microorganisms
conform with those imposed explicitly by TSCA 5 but have been modified
to accommodate issues specific to microorganisms. The exemptions
are based on previous EPA decisions on reviewed microorganisms and
existing industry practices. They permit activities with intergeneric
microorganisms under conditions which EPA has already reviewed and
approved.

More specific comments about issues in the proposed rule are addressed
in the remainder of this document.

II. STATUTORY FRAMEWORK - COVERAGE UNDER TSCA

A. APPLICABILITY OF TSCA TO MICROORGANISMS

In the proposal EPA reiterated its interpretation, first stated
in 1977, and discussed at length in 1984 (49 FR 50886, December
31, 1984), that microorganisms could be considered "chemical substances"
subject to TSCA.

Comments:

EPA received six comments (#12, 13, 15, 18, 37, 40) on the applicability
of TSCA to microorganisms. Three commenters (#12, 18, 40) indicated
their support for TSCA coverage of microorganisms, and three commenters
(#13, 15, 37) did not believe that it was appropriate to use TSCA
to regulate microorganisms. One commenter (#13) noted that they:

do not believe that it is appropriate to justify TSCA's jurisdiction
over microorganisms through adoption of a definition of chemical
substances which proposes that because DNA, RNA and microorganisms
in general are the result of combinations of "chemicals" and chemical
reactions, they can be considered chemical substances under TSCA,
thus establishing EPA's authority over them. While we acknowledge
that EPA has operated under this policy since 1984, we believe this
logic is also flawed, both scientifically and legally. In terms
of science, DNA, RNA and living things in general are composed of
biochemicals produced through biochemical reactions which are driven
by enzymes. * * * * * * * * * * * *

TSCA extended its authority to microorganisms, specifically those
intergeneric microorganisms which are formed as a result of deliberate
introduction of genetic material, in 1984 without justification
as to the relationship of such microorganisms in terms of their
effect on health and the environment, to the chemical substances
which were the original focus of TSCA.

One commenter (#12) was concerned that EPA's authority to cover
microorganisms under TSCA is ambiguous and suggested that the statute
be amended to clearly apply to microorganisms. Another commenter
(#15) expressed concern that the interpretation would be vulnerable
to a court challenge. This commenter suggested that a new comprehensive
biotechnology regulatory statute was the appropriate alternative.

Two other commenters, while stating that they thought it was inappropriate
to use TSCA to cover microorganisms, nevertheless suggested alternative
approaches for covering microorganisms under TSCA. One of these
commenters (#37) "question[ed] the appropriateness of the Toxic
Substance Control Act to regulate recombinant microorganisms" and
suggested that EPA consider developing a regulatory approach tailored
"towards the truly risky microorganisms instead of trying to create
all-encompassing regulatory oversight". The other commenter (#13)
recommended that EPA "refocus the oversight of TSCA to the original
intent of the legislation" and extend TSCA oversight only to those
microorganisms used to produce "potentially toxic and otherwise
unregulated chemicals."

EPA response:

EPA disagrees with the commenters who expressed concern that EPA's
authority under TSCA to regulate microorganisms was "ambiguous"
or legally vulnerable, and who suggested legislative amendments.
As noted in the 1986 Coordinated Framework for Regulation of Biotechnology,
an interagency workgroup concluded that existing health and safety
laws provided adequate authority to meet current and prospective
regulatory needs (51 FR 23303, June 26, 1986).

As indicated in the preamble to the proposed rule (59 FR 45527,
September 1, 1994), EPA believes that the TSCA 3(2) definition of
"chemical substance" gives EPA authority to review living microorganisms
under TSCA. Section 3(2) defines "chemical substance" as "any organic
or inorganic substance of a particular molecular identity, including
(i) any combination of such substances resulting in whole or in
part from a chemical reaction or occurring in nature...." All living
organisms, including microorganisms, fall within this definition.
Organisms are composed of chemical substances, both organic and
inorganic, which are of a "particular chemical identity". They can
be grouped into classes of chemical substances, such as carbohydrates,
fats, proteins, nucleic acids, water, etc.. As with all classes
of substances composing organisms, genetic material meets the definition
of chemical substance. Genetic material is composed of nucleic acids
(ribonucleic acid (RNA) and deoxyribonucleic acid (DNA)). Moreover,
the classes of chemical substances named above arise from a "chemical
reaction" or occur naturally and all of the processes occurring
in living organisms are, at base, chemical reactions. Thus, as organisms
contain substances of particular chemical identities from all of
the classes named above, they are clearly "combinations of such
substances".

EPA agrees with the commenter (#13), who stated that "DNA, RNA
and living things in general are composed of biochemicals produced
through biochemical reactions which are driven by enzymes." However,
biochemicals are a subclass of chemical substances, and biochemical
reactions are chemical reactions. At the most fundamental level,
drawing a distinction between chemicals and biochemicals is artificial.
Enzymes, a type of biochemical, are catalysts of chemical reactions.
The chemical reactions effected by enzymes can be effected by other
means. While there may be differences in efficiency and conditions
of reaction between enzymes and other catalysts, the outcome in
terms of action is the same.

The conclusion that genetic material, as well as living microorganisms,
are "chemical substances" under TSCA is consistent with the legislative
history, which makes it clear that the term "chemical substance"
is to be interpreted broadly. The 1976 House Committee report notes
that "the Committee recognizes that basically everything in our
environment is composed of chemical substances and therefore the
definition of chemical substance is necessarily somewhat broad."
In recognition of this fact, the statute explicitly extends the
term "chemical substance" to naturally occurring substances ( 3(2)(A)).

Congress explicitly provided a number of exclusions from the definition
of chemical substance, and nothing in the statute or the legislative
history indicates that Congress intended to exclude microorganisms
from the definition of chemical substances or from TSCA jurisdiction.
Nor does the definition of chemical substance distinguish between
potentially risky and safe substances. The legislative intent behind
the breadth of the definition is tied up in the motivation underlying
TSCA's enactment. TSCA was enacted to ensure that potential harmful
effects of all chemicals were discovered and prevented before substantial
segments of the population or environment were exposed. The House
Report notes that the basis for TSCA was the concern that:

[a] vast volume of chemicals have, for the most part, been released
into the environment with little or no knowledge of their long-term
health or environmental effects. As a result, chemicals currently
in commercial and household use are now being found to cause or
contribute to health or environmental hazards unknown at the time
commercial use began....As the preceding examples [of vinyl chloride,
asbestos, and PCBs] indicate, it is often many years after exposure
to a harmful chemical before the effects of its harm become visible.
By that time, it may be too late to reverse those effects....Because
diseases caused by environmental factors such as chemicals are often
not susceptible to direct medical cure, there is an urgent need
to prevent such chemically caused harm....Similarly the environmental
harm caused by chemicals, like health effects, may be irreversible,
and prevention of such harm is also urgently needed.

H.R. Rep. No. 1341, 98th Cong., 2d Sess. 3-4 (1976). The primary
mechanism by which this was to be accomplished was to require EPA
to review all new chemical substances before they were commercially
manufactured, without regard to whether the chemicals were thought
to be potentially risky, to determine whether they "may present
an unreasonable risk of injury to health and the environment". It
would be inconsistent with this design to restrict the statute's
jurisdiction in such a way to permit the unlimited manufacture of
and human and environmental exposure to a class of substances.

Nor does EPA have a factual basis for such an exclusion; as a class,
all microorganisms, like all chemicals, under certain circumstances,
have the potential to present an unreasonable risk. Microorganisms
can induce adverse effects through a number of mechanisms. One mechanism
is when the proliferating microorganisms grow in or on the target
organisms' tissues and directly affect the target organism (pathogenicity).
Microorganisms can also have deleterious effects when they produce
toxins which can work when the organism producing the toxin grows
outside of and at a distance from the target organism. For example,
humans can be adversely affected by consuming foods containing the
toxins produced by the bacterium Clostridium botulinum. The individual
need not ingest the bacterium to be affected. And there are other,
less direct ways in which a microorganism can affect other organisms;
for example, by altering the habitat and thereby indirectly affecting
populations occupying the same habitat. An example of this type
of activity is when algal blooms in lakes produce anoxic conditions
that can lead to disease symptoms and death in oxygen-requiring
populations in the lake. In this case, the adverse effects are due
to anoxia indirectly caused by the microbial population imbalances.
Indirect effects can also be caused by microbial populations producing
inorganic chemicals that can induce abnormal physiological processes
in other organisms. For example, hydrogen sulfide produced by microbial
populations in sediment can accumulate to concentrations toxic to
other organisms. (Ref. 1A)

EPA's jurisdiction over microorganisms is also consistent with
the Congressional intent that TSCA provide authority over substances
not specifically subject to other health and environmental laws
which address pesticides, foods, drugs, cosmetics, and medical devices.
Certain uses of microorganisms now being developed do not fall within
the above product categories. In general, the intended use of a
microorganism, or any other chemical substance, determines whether
it is subject to TSCA or to other laws. TSCA specifically excludes
microorganisms that are manufactured, processed or distributed in
commerce solely for use as a food, food additive, drug, cosmetic,
or medical device, as those terms are defined under the FFDCA, and
microorganisms that are manufactured, processed, or distributed
in commerce solely for use as pesticides, as defined under FIFRA.
With the exception of those exclusions, all microorganisms produced
for environmental, industrial, or consumer uses fall within the
scope of TSCA's jurisdiction. However, the fact that a microorganism
falls under TSCA jurisdiction does not necessarily mean that its
manufacturer will be required to submit a premanufacture notice,
nor that the microorganism's manufacture or use will be restricted
under TSCA. As will be discussed further below, in Unit II.D.3.,
TSCA authorizes EPA to receive notification regarding "new" chemical
substances and it is in this process that EPA considers the risks
of a chemical substance and whether restrictions on its manufacture,
processing, distribution in commerce, use, or disposal are necessary.

Not only is EPA's interpretation that microorganisms fall within
the definition of chemical substances consistent with the statute's
legislative intent, EPA has consistently interpreted TSCA to cover
microorganisms for almost 20 years. In the 1977 Inventory Reporting
Rules, EPA responded to a comment that commercial microorganisms
should not be considered "chemical substances" under TSCA, by stating:

"The term chemical substance is defined to mean 'any organic or
inorganic substance of a particular molecular identity including
any ination...occurring in nature.' This definition does not exclude
life forms which may be manufactured for commercial purposes and
nothing in the legislative history would suggest otherwise." (42
FR 64584-85, December 23, 1977).

And in fact, 192 microorganisms were reported to and listed on
the original TSCA Inventory. EPA further discusses the 192 microorganisms
listed on the original Inventory below in Unit V.B.4. EPA again
clarified in both the "Proposed Policy Regarding Certain Microbial
Products", 49 FR 50880 (December 31, 1984) in the Office of Science
and Technology Policy's (OSTP) "Proposal for a Coordinated Framework
for Regulation of Biotechnology", 49 FR 50856 (December 31, 1984),
and the 1986 final "Statement of Policy; Microbial Products Subject
to the Federal Insecticide, Fungicide, and Rodenticide Act and the
Toxic Substances Control Act", 51 FR 23313 (June 26, 1986), in OSTP's
"Coordinated Framework for Regulation of Biotechnology", 51 FR 23302
(June 26, 1986), that living microorganisms would be considered
chemical substances potentially subject to TSCA (49 FR 50886887,
December 31, 1984; 51 FR 23315, June 26, 1986).

Further, EPA's exercise of jurisdiction over microorganisms has
been consistent with its coverage under TSCA of traditional chemical
substances similarly used. For example, TSCA has always covered
traditional chemicals used as fertilizers. More recently EPA has
reviewed under TSCA submissions for microorganisms used as biofertilizers,
specifically for enhanced nitrogen fixation. Additionally, EPA has
reviewed submissions for both traditional chemicals and microorganisms
used as intermediates to produce specialty chemicals, such as enzymes
and pesticides.

EPA disagrees with the commenters (#13, 37) who in essence suggest
that only microorganisms that are known to pose risk, or that are
used to produce "potentially toxic and otherwise unregulated chemicals"
should be subject to TSCA. As discussed above, the statutory definition
of chemical substance does not exclude potentially "safe" or "non-toxic"
chemicals, although it does specifically exclude pesticides and
products subject to the FFDCA. Nor does it limit coverage only to
"risky" chemicals, or to those known to pose unreasonable risks.
Further, EPA does not interpret the definition to incorporate an
exclusion for all chemical substances that EPA has not specifically
found are "potentially toxic and otherwise unregulated" or that
potentially present an unreasonable risk. Congress explicitly rejected
bills that restricted EPA's responsibility to reviewing only "potentially
dangerous chemicals" (E.g., H.R. Rep. No. 1341 at 82 and 140; Cong.
Rec. H8803-8863; Cong Rec. S4397-4432). Accordingly, EPA believes
that the statutory definition should be interpreted broadly.

As a practical matter, EPA could not determine which microorganisms
were potentially toxic, or would produce potentially toxic chemicals,
without some information on the microorganism. As with traditional
chemical substances, all microorganisms are "potentially toxic",
depending on variables such as the concentration, the route of exposure,
or the sensitivity of the exposed organisms. Similarly, all living
organisms produce a range of substances which could be "toxic" under
appropriate circumstances. EPA cannot determine whether a chemical
substance may present a risk without some information on the context
and manner in which it will be used, and EPA does not currently
have the basis for determining a priori that a microorganism will
not have the potential to present a risk, when commercially manufactured,
processed, distributed, or disposed.

Despite the commenter's (#13) implication, it is not merely the
chemicals produced by microorganisms that may pose an unreasonable
risk of injury to human health or the environment; the microorganisms
themselves have the potential to present an unreasonable risk of
injury to the environment from mechanisms other than toxin production.
For example, pathogenic microorganisms can produce factors that
are not "toxins" but which are important to the pathogenic process.
In another example, a microorganism could displace or "out compete"
existing organisms from an ecosystem, e.g., as happens with algal
blooms. There is also the risk that a microorganism could transfer
genetic material to other organisms, thereby conferring traits which
would be harmful in the general population. These risks would not
be addressed by the commenter's (#13) suggestion. EPA currently
addresses many of the risks posed by chemicals produced by microorganisms
in its traditional chemicals program. Chemical substances produced
by microorganisms and used as products subject to TSCA are subject
to review under TSCA 5, separately from the microorganisms that
produce them. Such chemical substances are subject to the same requirements
and procedures as chemicals produced by other means.

Further, even if EPA were to adopt the commenters' suggested restrictions,
few, if any, microorganisms would be excluded. As noted above, all
microorganisms are potentially toxic and produce a range of potentially
toxic substances. It is also unclear to what extent the criterion
that the chemical substance be "otherwise unregulated" would exclude
any microorganisms; TSCA was intended to apply when other statutes
were insufficient to prevent or reduce an unreasonable risk of injury.

At most, EPA could exempt microorganisms from the 5 review process,
but as discussed below at Unit II.D.3., EPA can grant such an exemption
only to the extent that EPA can determine the microorganisms will
not present an unreasonable risk of injury to health or the environment.

B. APPLICABILITY OF TSCA TO PLANTS AND ANIMALS

In the proposal, EPA indicated that based on its interpretation
of the term "chemical substance" to include living organisms, plants
and animals could also be covered under TSCA. EPA stated that the
rulemaking was limited to microorganisms. However, EPA also reserved
authority under TSCA to screen transgenic plants and animals in
the future as needed.

The final rule is limited to coverage of living microorganisms
under TSCA. Should EPA determine that TSCA coverage of organisms
other than microorganisms is necessary, such organisms that will
be addressed in a separate document, at which time the public will
be given further opportunity to comment on any proposed changes
to the TSCA biotechnology program.

C. GENERAL TYPES OF PRODUCTS SUBJECT TO TSCA

EPA reiterated in the proposed rule that the definition of "chemical
substance" in TSCA excludes pesticides, tobacco and tobacco products,
food, food additives, drugs (including human drugs, animal drugs,
and animal biologics), cosmetics, and substances that are used as
medical devices (59 FR 45527, September 1, 1994). Microorganisms
may be used as intermediates to produce chemical substances that
are in turn used as products subject to TSCA or other statutes.
The Food and Drug Administration (FDA) considers intermediates used
to make products subject to FFDCA to be components of these products,
and therefore they are excluded from regulation under TSCA. All
other intermediates, including pesticide intermediates, are presumptively
subject to TSCA jurisdiction.

Four commenters (31, 13, 28, 33) raised issues regarding the types
of products covered under TSCA and the overlap with other authorities,
specifically FFDCA and FIFRA. One commenter (31) requested EPA clarification
regarding TSCA oversight of certain products. Three commenters (13,
28, 33) took issue with EPA regulation under TSCA of specific microorganisms
which EPA has determined are pesticide intermediates under TSCA.

1. Clarification of TSCA oversight.

Comments:

One commenter (#31) requested that EPA confirm that this rule does
not cover:

b. seeds which result from plant progeny, 59 Fed Reg at 45526 ("plants
and animals are not subject to this rule");

* * * * * * * * * * *

5 . Plants and seeds, including but not limited to plants and seeds
regulated by USDA and by APHIS." (Italics in original).

EPA response:

TSCA 3 explicitly ties TSCA jurisdiction to the determination of
the use for which the microorganism is manufactured, processed,
or distributed in commerce. A microorganism will not fall within
TSCA's jurisdiction insofar as it is actually manufactured, processed
or distributed in commerce for use as a pesticide, food, food additive,
drug, cosmetic, or device. Microorganisms manufactured for multiple
uses would be subject to TSCA for only those uses that fall within
the scope of TSCA's jurisdiction.

To be excluded from TSCA jurisdiction as a pesticide, a microorganism
must both be a pesticide, as defined by FIFRA, and must be "manufactured,
processed, or distributed in commerce for use as a pesticide". Thus,
a substance that can act as a pesticide will be subject to TSCA
jurisdiction if it is not "manufactured, processed, or distributed
for use as a pesticide".

Under FIFRA, whether a microorganism is a pesticide depends on
a determination of intent; 2(u) of FIFRA, in relevant part, defines
a pesticide as:

(1) any substance or mixture of substances intended for preventing,
destroying, repelling, or mitigating any pest, and (2) any substance
or mixture of substances intended for use as a plant regulator,
defoliant, or desiccant,...

The requisite intent may be demonstrated by direct evidence, or
may be inferred from various circumstances. Examples of direct evidence
of an intent to manufacture, sell or distribute a microorganism
as a pesticide include the following: (1) submission of a notification
under 40 CFR 172.3 for a field test for a microbial pesticide; (2)
an application for an experimental use permit under 40 CFR 172.4;
(3) an application for registration under 40 CFR part 152; or (4)
submission by an exporter of a Purchaser Acknowledgment Statement
under 40 CFR 168.75.

This rule does not apply to microorganisms for which any of the
four documents listed above have been filed, to the extent that
the microorganisms are actually manufactured, processed, or distributed
in commerce solely for use as a pesticide. Thus, in response to
the commenter (#31), EPA will confirm that all pesticides manufactured
solely for domestic field trials for which a microbial notification
was submitted in accordance with 40 CFR 172.45, or manufactured
solely for export, for which an export notification has been filed
pursuant to 40 C.F.R. 168.75, will not be subject to this rule.
However, the determination of whether a particular microorganism
is a pesticide will, to some extent, necessarily be a case-by-case
decision that turns on the facts surrounding the individual substance.
Prior to actions demonstrating that a microorganism is a pesticide
and actions demonstrating an intent to manufacture, sell or distribute
it in commerce solely for use as a pesticide, a microorganism, including
those in the process of research and development, will be presumed
to be a chemical substance within the meaning of TSCA, and will
be subject to TSCA and its implementing regulations.

Microorganisms used to produce foods, food additives, drugs, and
cosmetics would not be subject to TSCA because they are within FDA's
jurisdiction under FFDCA. The definitions in 201 of the FFDCA provide
that a substance that is intended for use as a component of a food,
food additive, drugs, cosmetic, or device is encompassed within
the meaning of such terms respectively, and is subject to regulation
under the FFDCA.

EPA has previously discussed these issues at length in the 1977
Inventory Reporting Regulations (42 Fed. Reg. 64586 (December 23,
1977)), and in several other EPA documents.

As discussed above, EPA has limited this rulemaking to coverage
of living microorganisms under TSCA. Therefore, plants and seeds
would not be subject to this rulemaking. However, as EPA stated
in its proposed rule, "microorganisms into which plant or animal
gene segments are intentionally incorporated would be considered
microorganisms potentially subject to TSCA". 59 FR 45526, 45527
(September 1, 1994).

2. Coverage of pesticide intermediates.

Comments:

Three commenters (#13, 28, 33) took issue with EPA's coverage under
TSCA of specific microorganisms that EPA has determined are pesticide
intermediates. The commenters claimed these microorganisms were
never isolated and thus should not be subject to TSCA requirements.
One commenter (#13) stated that microorganisms used to produce pesticides
should be regulated only under FIFRA:

Historically, the Agency has regulated chemical intermediates used
to produce pesticides under TSCA, while pesticide active ingredients
per se are specifically exempted from TSCA regulation and are fully
regulated under FIFRA. We understand that the major reason for such
an approach is that pesticide intermediates are typically further
reacted to produce pesticides, but they can be used potentially
to produce chemical products other than pesticides. The regulatory
authority of FIFRA does not cover these intermediates unless they
are a part of an integrated manufacturing process used to produce
a pesticide active ingredient, in which no intermediate is isolated
in the process. We contend that the use of microorganisms to produce
pesticides, whether genetically engineered or not, has no place
within TSCA, because such processes must be very specific to the
use of a recipient and vector system whose sole purpose is to produce
a pesticide end product. These systems are not at all analogous
to the production of intermediates in typical chemical synthesis
and reaction processes.

The other two commenters (#28, 33) suggested that the tiered exemptions
from MCAN reporting set forth in subpart G of these final regulations
be extended to cover nonisolated intermediates such as the microorganisms
described above.

EPA response:

EPA disagrees with the commenters who state that these microorganisms
are not pesticide intermediates and should not be regulated under
TSCA. Congress established EPA's authority to cover pesticide intermediates
under TSCA and EPA has consistently interpreted TSCA to cover pesticide
intermediates since 1977. Raw materials and intermediates produced
or used in the manufacture of a pesticide, which are not themselves
pesticides or which are not manufactured, processed or distributed
in commerce for use as pesticides, are substances that can be regulated
under TSCA.

Moreover, the commenter (#13) has misunderstood the interplay between
TSCA and FIFRA jurisdiction over chemical substances. As discussed
above, unless a microorganism both meets the definition of a pesticide,
and is manufactured, processed or distributed for use as a pesticide,
it is subject to TSCA. Pesticide active ingredients are neither
per se specifically excluded nor exempted from TSCA regulation,
nor are they always fully regulated under FIFRA. An active ingredient
that has no significant commercially viable use as distributed or
sold, other than use for pesticidal purposes or for manufacturing
a pesticide, is regulated by FIFRA as a pesticide. An active ingredient
that does not meet all of the requirements listed in 40 CFR 152.15(b)
will generally not be considered a pesticide, and therefore may
be subject to TSCA.

Regarding the specific pesticide intermediates referred to by commenters,
the registered pesticide is the killed microorganism, and because
no evidence has been presented to demonstrate an intent to sell,
distribute, or use the live microorganisms as a pesticide, EPA considers
the live microorganisms to be pesticide intermediates subject to
TSCA. During the manufacturing process, the live microorganisms,
which have been modified to contain genes which encode for the production
of a toxin selective for lepidopteran insects, are killed. Only
the killed encapsulated microorganisms containing the toxin gene
sequences are regulated under FIFRA, as the live microorganisms
are not intended to be used as pesticides, and are not sold or distributed
as pesticides, but rather are intended to produce pesticides. Accordingly,
the live microorganisms are appropriately covered under TSCA as
pesticide intermediates. EPA has consistently interpreted TSCA to
cover, as pesticide intermediates, precursor chemical substances
consumed in reactions that produce active ingredients for use in
pesticides.

Risk considerations also dictate that EPA address the living microorganisms.
The potential exists for unintentional releases of the microorganisms
and the microorganisms may be capable of surviving for long periods
of time in the environment. Prior to inactivation, the microorganisms
present distinct hazard and exposure issues that should be addressed
in the manufacturing process. The live microorganisms are appropriately
regulated as pesticide intermediates under TSCA.

EPA does not agree with the commenters who suggest that the live
microorganisms be considered non-isolated intermediates and thus
exempt from TSCA 5. In 40 CFR 720.3(w), a non-isolated intermediate
is defined as a chemical substance "not intentionally removed from
the equipment in which it is manufactured." This refers to chemicals
that are created and consumed within the same vessel or system.
For example, when two chemicals are reacted to produce a third,
there may be intermediate products created that are not isolated
from the process and are consumed in intermediate reactions. EPA
believes that it is unlikely that intergeneric microorganisms would
meet the 720.3(w) definition of non-isolated intermediate because
the live microorganisms are created and isolated outside the fermentation
vat and then added to the vat. Given the present technology, it
is unlikely that microorganisms will meet the definition of non-isolated
intermediates. EPA believes that it will be necessary to construct
and maintain most microorganisms separately and then introduce them
to a fermentation vat for production.

EPA also does not agree with the commenters who suggest extending
the tiered exemption to non-isolated intermediates. The tiered exemption,
which will be discussed below in Unit III.C, is structured around
three specific criteria. One of these criteria is that the recipient
microorganism must be listed as an eligible candidate. At this point
in time, no such intermediates are listed at 725.420. However, in
conjunction with the tiered exemption, EPA has established a process
at 725.67 whereby submitters can petition EPA to add a specific
microorganism to the list of eligible recipients, if the microorganism
meets the criteria for the exemption.

In summary, EPA believes that live microorganisms used as intermediates
are appropriately regulated under TSCA, whether they are ultimately
killed for use as pesticides or they are used solely to produce
specialty chemicals which are subject to TSCA or FIFRA.

D. SCOPE

EPA proposed to retain for this rulemaking the 1986 policy statement
interpretation of "new" microorganisms as intergeneric microorganisms
not listed on the TSCA Inventory. EPA also proposed to retain the
exclusion from the definition of "new microorganism," intergeneric
microorganisms resulting solely from the addition of well-characterized,
non-coding regulatory regions. In the proposal EPA also discussed
mobile genetic elements (MGEs) and how it would apply its MGE policy
to the interpretation of "new" microorganisms for the purposes of
TSCA 5. The proposal defined "MGE" as an element of genetic material
that has the ability to move genetic material within and between
organisms. As part of EPA's MGE policy, the MGE is identified as
belonging to the genus from which it was originally isolated. EPA
indicated that it might decide to reconsider its interpretation
of "new" microorganism in a separate rulemaking and requested comment
on whether it should explore alternative interpretations.

EPA received 17 comments on scope of oversight. Two commenters
(#12, 36) supported EPA's interpretation of "new" microorganisms
as stated in the proposal without additional modifications. The
15 other commenters requested clarification on the use of taxonomy
as a regulatory standard; suggested specific modifications to the
intergeneric scope; and/or requested a more "risk-based" approach
to oversight.

1. Retention of "intergeneric" interpretation

Comments:

Of the 17 comments received on scope of oversight, only four commenters
strongly opposed the intergeneric scope and supported another approach,
while 13 commenters expressed some level of support for intergeneric,
albeit with some modifications. One commenter (#12), while acknowledging
that there are problems with an intergeneric scope, indicated: "[n]evertheless,
no one has proposed a clearly superior scope, despite years of discussion
and debate. Adoption of the intergeneric scope by EPA at this time
is logical."

EPA response:

EPA is retaining its interpretation of "new" microorganisms as
stated in the 1986 policy and the proposed rule. Under that interpretation,
microorganisms resulting from deliberate combinations of genetic
material from organisms classified in different genera constitute
"new" microorganisms subject to 5 reporting requirements. EPA terms
such microorganisms intergeneric. EPA has edited the intergeneric
definition at 725.3 to clarify which microorganisms are included
and excluded in the definition. The definition reads as follows:

"Intergeneric microorganism means a microorganism that is formed
by the deliberate combination of genetic material originally isolated
from organisms of different taxonomic genera.

(1) The term "intergeneric microorganism" includes a microorganism
which contains a mobile genetic element which was first identified
in a microorganism in a genus different from the recipient microorganism.

(2) The term "intergeneric microorganism" does not include a microorganism
which contains introduced genetic material consisting of only well-characterized,
non-coding regulatory regions from another genus."

Intergeneric scope. EPA has decided to retain its 1986 interpretation
of "new microorganisms" as those microorganisms resulting from the
deliberate combining of genetic material from organisms classified
in different genera because of the degree of human intervention
involved, the significant likelihood of creating new combinations
of traits, and the greater uncertainty regarding the effects of
such microorganisms on human health and the environment. This approach,
based on a taxonomic standard, both identifies a group of microorganisms
whose behavior in the environment poses significant uncertainty,
which therefore warrant regulatory review under TSCA 5, and provides
a way of defining "new" microorganisms under TSCA 5.

Section 5 requires all manufacturers of new chemical substances
to submit information to EPA 90 days before commencing commercial
manufacture, to permit EPA to examine whether they may present an
unreasonable risk of injury to health and the environment. As discussed
in Unit II of the Response to Comments Document, the rationale for
the requirement was to have EPA attempt to resolve the uncertainties
surrounding the class of new chemical substances--specifically,
whether they were likely to cause unreasonable risks before they
were introduced into the environment.

As noted previously, EPA has attempted, where possible, to make
its regulatory program for microorganisms consistent with its TSCA
program for traditional chemical substances. As with traditional
chemical substances, any microorganism that is not on the Inventory
is "new" and is therefore subject to premanufacture reporting. In
compiling and maintaining the TSCA Inventory, EPA distinguishes
between "new" chemical substances, which are subject to PMN, and
"naturally occurring" substances, which are not. Under the Inventory
reporting rules, naturally occurring substances and substances derived
from nature with limited human intervention are considered to be
automatically included on the Inventory, and thus are not "new".
40 C.F.R. 710.4(b).

This approach reflects a general philosophy that human intervention
at a relatively simple level does not remove a substance from the
category of naturally occurring. The act of mechanically isolating
a substance from nature does not alter its status as "naturally
occurring" or make it subject to 5 reporting. In short, under EPA's
traditional chemical program, two principles must be considered
in determining whether a substance is exempt from 5 reporting by
virtue of being naturally occurring. First it must be derived from
nature. Second, the extent of human intervention in producing it
must be limited.

The Agency believes that similar logic should be used to determine
whether a microorganism is "new". In principle, naturally occurring
microorganisms are those that (1) exist as a result of natural events
or processes, or (2) have been developed as a result of limited
manipulation of natural processes. For example, normal events of
reproduction or evolution do not produce "new chemical substances"
subject to 5 reporting any more than chemical reactions in nature,
unmediated by humans, create "new chemical substances". Similarly,
human exploitation of natural reproductive processes, as in the
case of traditional animal and plant breeding, does not create a
"new chemical substance", any more than does extracting a nonliving
substance by manual, mechanical or gravitational means from a naturally
occurring substance. Therefore, "naturally occurring microorganisms"
are automatically listed on the TSCA Inventory, and are not subject
to this rule.

EPA has defined "new microorganisms" as those microorganisms formed
by combining genetic material from organisms classified in different
genera, i.e., intergeneric. EPA believes these microorganisms would
have a higher potential for exhibiting a new trait or combinations
of traits, and thus are less likely to occur through natural processes
in nature.

A trait is the ability to perform a function; e.g., to combine
two atoms of hydrogen with an atom of oxygen to make water. In a
living organism, the means of effectuating a function is usually
a protein (enzyme). The information necessary for an organism to
make and control the activity of a protein is encoded in the organism's
genetic material. The genetic information an organisms possesses
therefore determines what substances it will make and traits expressed
and thus how it will look and behave.

EPA decided that a standard based on taxonomy was an appropriate
method of defining a "new microorganism". Taxonomy is a system of
orderly classification of organisms according to their presumed
natural relatedness. Organisms that are more closely related are
more likely to have the same traits than are microorganisms that
are more distantly related. EPA also decided that genus was the
appropriate taxon within the taxonomic system established by Whittaker
(cited in Atlas and Bartha (1987)(Ref. 24)) to describe a "new microorganism"
because a combining event involving the genetic material of organisms
classified in different genera presents a sufficiently high potential
of the resulting microorganism exhibiting a new trait or new combinations
of traits. Since the organisms contributing genetic material to
intergeneric microorganisms are, in general, more distantly related
than the microorganisms contributing genetic material to intrageneric
microorganisms, intergeneric microorganisms have a higher potential
of exhibiting a new trait or new combinations of traits.

In addition, EPA has determined that intergeneric microorganisms,
since they are more likely to exhibit "new traits", are not as likely
to be found occurring naturally and thus can be seen as the product
of a substantial degree of human intervention.

A scope based on a taxonomic standard such as intergeneric has
certain advantages. A taxonomy based scope relates directly to the
potential of the resulting new microorganism to display a new trait
or new combinations of traits, since organisms that share a close
evolutionary ancestry are more likely to have traits in common than
those that are more distantly related. In addition, the taxonomy
standard is independent of the technology used to create the microorganism.
A number of techniques may be used to produce intergeneric microorganisms.
Any intergeneric microorganisms created by techniques developed
in the future would also be subject to these regulations. Finally,
since intergeneric microorganisms are more likely to express new
traits, the behavior of these microorganisms is significantly less
predictable than the behavior of intrageneric microorganisms. EPA
believes this measure of unpredictability warrants a level of regulatory
scrutiny.

Taxonomy reflects current scientific observations about phenotypic,
and to a certain extent, genotypic, differences between organisms.
Although subject to periodic revision within the scientific community,
taxonomy is a common language used by scientists. Basing the standard
for interpreting "new" for microorganisms on an existing system
for categorizing organisms obviates the need to create another system
for determining if a microorganism is subject to reporting under
TSCA 5. Taxonomy is understood by the regulated community and its
use imposes little, if any, additional burden to determine whether
a microorganism is new.

For circumscribing what is "new" for TSCA 5 purposes, microbial
taxonomy is a relatively clear and objective criterion for determining
the scope of oversight, and thus provides clarity for the regulated
community and provides an enforceable criterion. Taxonomic designations
provide a widely available standard and point of reference. It is
reasonable to expect a manufacturer to use the taxonomic literature
and/or taxonomists to determine currently accepted names of organisms
they wish to utilize. Once a manufacturer knows the genus of these
microorganisms, he or she can readily determine whether a microorganism
is intergeneric and thus whether it is "new" within the 5 context.

EPA recognizes that taxonomy, particularly microbial taxonomy,
is subject to change and that new information concerning organisms'
properties and relationships could alter taxonomic designations.
In recent years, new tools have become available to microbial taxonomists
which have allowed them to clarify phylogenic relationships among
microorganisms. Some microbial genera are highly defined and consist
of closely related members which are likely to share common information
in their genetic material. However, other microbial genera may consist
of members more closely related to microorganisms classified in
other genera than to each other. While reorganizations could result
in changes in taxonomic designations for some microorganisms in
the short term, it should result in greater stability in the various
taxa in the long term. EPA anticipates that as reclassifications
occur in the scientific community, the intergeneric standard will
become a better reflection of the probability of new traits or new
combination of traits resulting from the deliberate combining of
genetic material. However, even under current taxonomic designations,
gene exchange is generally less likely to occur naturally among
members of different microbial genera than among members of the
same genus, and this suggests a new trait or new combinations of
traits are more likely to occur when genetic material from microorganisms
in different taxonomic genera are combined. Moreover, the probability
of a new trait or new combination of traits occurring increases
when the organisms combining genetic material are more distantly
related; e.g., even among the microorganisms, bacteria classified
in different genera are more likely to share common traits than
bacteria and fungi, and bacteria classified in different genera
even more likely to share traits than bacteria with plants and animals.
While taxonomic reorganizations could affect the status, for TSCA
purposes, of some microorganisms formed by combining genetic material
from some relatively closely related microorganisms, the TSCA 5
status of microorganisms formed by combining genetic material of
more distantly related organisms is unlikely to be affected. These
considerations suggest that while taxonomy may not be a perfect
standard, its use is likely to capture for review those microorganisms
with a higher probability of displaying new traits or new combinations
of traits. EPA discusses in other units of this Response to Comments
document how it will accommodate within its regulatory structure
reclassifications of microorganisms into new or different taxa.

EPA believes that on whole, the intergeneric definition generally
captures for review microorganisms with a higher potential for displaying
a new trait or new combination of traits. While this approach does
have some drawbacks, EPA believes that its procedures are sufficiently
flexible to accommodate these drawbacks, and that the advantages
to using the intergeneric definition outweigh the disadvantages.

EPA inserts the term "originally isolated" into the definition
of intergeneric to clarify that genetic material belongs to the
genus from which it was originally isolated. For example, if a sequence
of genetic material from microorganism A is introduced into microorganism
B, subsequently transferred from microorganism B to microorganism
C, the manufacturer or developer must consider the genera of microorganisms
A and C in determining the status of the microorganism resulting
from the second combining event described above.

Mobile genetic elements. In the proposal (59 FR 45528), EPA also
discussed mobile genetic elements (MGEs) and how it would apply
its MGE policy to the interpretation of "new" microorganisms for
the purposes of TSCA 5. EPA has retained the policy and incorporated
it in its definition of intergeneric microorganism. MGEs, which
are elements of genetic material such as plasmids and transposons,
may in nature move within or among organisms and may carry with
them and transfer genetic material in addition to their own. MGEs
are vectors that move genetic material among organisms. These elements
may move across taxonomic boundaries and therefore are not a constant
part of the genome of one particular taxonomic group or another.

After publication of the 1986 policy statement describing EPA's
intergeneric interpretation, several producers of microorganisms
inquired about the status under TSCA of microorganisms containing
MGE material. Therefore, it was necessary for EPA to develop an
approach for addressing MGEs under the intergeneric interpretation.
In keeping with its intergeneric definition which focused on the
origin of the introduced genetic material, EPA decided that microorganisms
would be considered intergeneric if they contained an MGE first
identified in a microorganism in a genus different from the recipient
microorganism genus. Microorganisms would be considered intrageneric,
and not new, if the MGE was first identified in a microorganism
in the same genus as the recipient. EPA has continued to use this
policy regarding MGEs to assist in determining whether a microorganism
is intergeneric.

The issue of whether the MGE may be indigenous to the recipient
genus is not considered in EPA's approach to determining whether
the final microorganism is inter- or intrageneric. The major consideration
is the source of the organism in which the MGE was first identified.
The source of the organism in which the MGE was first identified
may be determined by a search of relevant published scientific literature
or by reviewing available databases such as GENBANK. Such a literature
or database reference is often the first to name, and possible describe,
the MGE. Subsequent references postdating this first reference are
frequently not relevant for determining the intergeneric status
of the MGE, since after isolation an MGE is often transferred to
a different taxon where it can be more easily maintained and studied.
Although EPA recognizes that MGEs may occur in more than one genus
in nature EPA believes that for the moment use of the source of
the organism in which the MGE was first identified for classifying
MGEs provides the most straightforward regulatory approach under
its intergeneric definition. EPA will continue to use this approach
until it can reevaluate the status of MGEs within an intergeneric
standard in a future rulemaking. EPA has included a statement about
MGEs in its definition of intergeneric microorganisms in this final
rule.

Well-characterized, non-coding regulatory regions. In the 1986
policy statement and in the proposed rule, EPA excluded from the
definition of intergeneric microorganisms, those microorganisms
that resulted from the addition of intergeneric material that is
well-characterized and contains only non-coding regulatory regions
such as operators, promoters, origins of replication, terminators,
and ribosome-binding regions. Where only regulatory material is
transferred, no distinctly new combinations of traits are introduced.
Instead, existing traits in the receiving microorganisms are amplified
or changed quantitatively. Therefore, EPA believes that microorganisms
formed only through intergeneric transfer of well-characterized,
non-coding regulatory regions should not be considered "new" microorganisms
under TSCA 5. EPA emphasizes that this exclusion applies only to
intergeneric microorganisms that have resulted solely from the addition
of well-characterized, non-coding regulatory regions. If the final
microorganism contains any regions from organisms of other genera
that do not meet this restriction, such as coding regulatory regions
or any poorly characterized regions, the microorganism is considered
new and is subject to these regulations.

2. Clarification regarding taxonomy

Comments:

Three commenters (#18, 30, 37) were concerned about using taxonomy
to define scope because of the continual changes in microbial systematics.
They requested that EPA indicate which of several taxonomic systems
EPA would accept in determining whether a microorganism was intergeneric
and how changes in taxonomic classification will be accommodated.
Two commenters (#18, 30) requested that EPA indicate how it will
classify totally synthetic sequences.

EPA response:

The intergeneric definition is based on taxonomic designations.
While imperfect in many ways, taxonomy appears to provide the best
available standard for "dissimilarity" among organisms. Although
subject to periodic revision within the scientific community, taxonomy
reflects the most recent scientific observations about phenotypic
and genotypic differences between organisms. EPA believes that the
taxonomic status of most organisms relative to the recipient organism
will be clear. However, EPA recognizes that changes in taxonomic
designations for microorganisms may occasionally create less clear
situations. Nonetheless, EPA expects that organisms being used in
biotechnology will have or can be assigned clear taxonomic designations
and that it should not be difficult to determine whether a microorganism
is intergeneric. However, submitters who are uncertain as to whether
their microorganism would be considered intergeneric should consult
EPA.

Several commenters requested that EPA acknowledge the need for
flexibility in taxonomic designation to accommodate the changes
made, and being made, in classification of microorganisms. EPA agrees
with the sentiment in these comments. The technology of microbial
identification is improving rapidly, and as a result, major modifications
in taxonomic organization of microorganisms have taken place recently,
such as the recent subdivisions of the genera Pseudomonas and Bacillus,
each into several new taxonomic units that include new additional
genera. Additional changes can be expected in the future as well.
These modifications of taxonomies have made possible the classification
of previously difficult to categorize strains and have employed
techniques that utilize genetic as well as phenotypic methods. EPA
acknowledges that this development of systematics has led to multiple
synonyms for some species, some used concurrently, such as the former
Pseudomonas and the current Burkholderia cepacia. It is reasonable
to expect that submitters will be aware of the most current designations
for their strains, but it is possible that new developments will
leave some species in transition; i.e. new designations may be proposed,
but not yet fully accepted by the microbial systematics community,
such as for example the recently named Sinorhizobium meliloti. EPA
will take into account changes in systematics as they occur.

As taxonomies change, EPA agrees that submitters may use alternative
designations for their species when appropriate. EPA must know,
however, which classification scheme was employed by the submitter
in identifying the organisms used as DNA donor and recipient. That
will allow EPA to relate the submitter's name for its microorganism
with current terminology, if the names differ. When both are known,
EPA will include the new and formerly accepted designations in its
species descriptions. In some cases, the revised taxonomies do more
than merely change a species or genus name. Often taxa are subdivided
because the original grouping combined disparate organisms on the
basis of a few remarkable features, such as with the genera Pseudomonas
and Bacillus. Conversely, sometimes taxa have been improperly separated
based on a few features, e.g. Pseudomonas gardneri and Xanthomonas
campestris. Modern methods are revealing these problems and resulting
in many taxonomic reorganizations. EPA will need to determine the
appropriate new taxonomic affiliation of a submitter's organism
under such circumstances and may require some supplemental information
to permit that determination. It is not intended that these additional
data requirements be burdensome, but it is necessary to achieve
a designation that unambiguously and accurately describes the submitted
organism.

EPA acknowledges that there is a wide range of methods used to
identify microorganisms and that these can provide conflicting identifications.
EPA does not believe that it should prescribe any particular method
for use in identifying submitted microorganisms. Rather, EPA believes
submitters should use techniques that are appropriate for the species.
Some species are readily identified by simple techniques, whereas
others may require a more complicated set of methods. Submitters
may use methods of their choice, but should be able to document
why individual identification methodologies were selected, so that
EPA may review the information properly.

A few submitted microorganisms will not fit neatly into any current
classification scheme. Correlation of these "transitional" strains
with existing taxa should be illustrated where possible, but submitters
should not assign the name of the closest classified taxon to a
new strain, if identity with that taxon cannot be confirmed. Rather,
it is appropriate to indicate that the submitted microorganism is
not currently identifiable with any existing species (or genus)
and that it may belong to a new, as yet undescribed, species. Provided
accompanying documentation permits EPA to recognize that the submitted
microorganism is unique and can be distinguished from other similar
microorganisms, an uncertain species designation would be acceptable.
An example of the type of information that would be useful to EPA
in such circumstances is provided in Murray and Stackebrandt, 1995
(Ref. 1) which recommends use of the category Candidatus as the
taxonomic status for uncultured procaryotic cells which lack information
on characteristics for a complete description but for which information
exists on more than a sequence. The article suggests that in addition
to sequence information, phenotypic information such as structural,
metabolic and reproductive features and the natural environment
in which the organism can be identified be included. These kinds
of data could also be provided to EPA as supplemental information
under 725.12(b) for new microorganisms which have uncertain taxonomic
status for any of several reasons, including but not limited to
being nonculturable.

If the taxonomic positions of some organisms are ambiguous or if
the boundaries of a genus are in dispute, EPA expects the submitter
to be aware of these controversies. If the taxonomy at the genus
level is controversial such that microorganisms may be considered
by some to belong to the same genus and by others to belong to different
genera, the submitter must comply with the requirements of TSCA
for intergeneric microorganisms or contact EPA for a case-specific
determination. In general, submitters should expect that microorganisms
will be considered intergeneric if the taxonomy of either source
organism, at the genus level, is controversial.

In the case of chemically synthesized genes, EPA will follow a
similar principle. EPA recognizes that the genetic sequence of the
synthesized gene may be identical to a sequence known to occur in
the same genus as the recipient microorganism, in which case the
resulting products would be considered intrageneric. The manufacturer
should be prepared to document how this determination was made.
If the sequence of the synthesized gene is different or not known
to be identical to a sequence in the genus of the recipient microorganism,
the resulting new microorganism would be considered intergeneric.
Submitters in this category should consult EPA.

3. Modifications to scope

Comments:

Eleven commenters (#8, 15, 18, 23, 24, 25, 26, 28, 33, 34, 35)
suggested that the intergeneric scope could be improved by additional
modifications, primarily to the MGE policy and the exclusion for
well-characterized non-coding regulatory regions. Three of these
commenters (#28, 33, 34) felt that intergeneric should be related
specifically to a phenotypic change. "The central focus as to newness
should be on whether there has been an intergeneric transfer of
a new phenotypic trait." (#33)

Two commenters (#8, 18) opposed the exclusion for well-characterized,
regulatory regions on the grounds that the locus of insertion can
have "unforeseen effects". One commenter (#35) suggested that the
terms "well-characterized" and "non-coding regulatory region" be
separately defined in 725.3, and suggested the following modified
definition of "non-coding regulatory region":

Non-coding regulatory region' means a segment of genetic material
which solely controls the activity of other regions that code for
protein or peptide molecules or act as recognition sites for the
initiation or termination of nucleic acid or protein synthesis.

Six commenters (#8, 15, 18, 24, 30, 35) felt that the intergeneric
scope should be modified to take into account natural gene exchange
among microorganisms in different taxonomic genera. Four commenters
(#8, 18, 24, 35) suggested that EPA use the NIH Guidelines list
of natural exchangers as a starting point to exclude natural exchangers.
Seven commenters (#8, 18, 23, 26, 28, 33, 35) felt that the MGE
policy was too restrictive. Three commenters (#8, 18, 35) suggested
that exclusion of the natural exchangers from the intergeneric definition
would improve the scope. Four commenters (#25, 28, 33, 35) suggested
that EPA place on the Inventory the NIH list of certified host-vector
systems. One commenter (#15) urged EPA to adopt a process-based
scope focusing on microorganisms "produced by certain techniques
that can be used to combine organisms [sic] that do not exchange
genetic material in nature."

EPA response:

As discussed above, EPA will retain for the time being its intergeneric
interpretation of "new" microorganisms. EPA will continue to exclude
from the definition of "new" microorganism those microorganisms
resulting from the addition of intergeneric material that is well-characterized
and contains only non-coding regulatory regions. Additionally, EPA
will retain its MGE policy, under which microorganisms will be considered
"new" if the MGE was originally isolated from a microorganism in
a genus different from the recipient genus.

In response to comments, EPA has revised some of its definitions
at 725.3 to provide greater clarity for the regulated community.
The word "introduced" has been added to subparagraph (2) in the
definition of "intergeneric microorganism" to clarify that microorganisms
which contain introduced genetic material consisting only of well-characterized,
non-coding regulatory regions from another genus are not considered
intergeneric for the purposes of TSCA 5. EPA agrees with the commenter
(#35) who suggested that "well-characterized" and "non-coding regulatory
region" be separately defined. Therefore, the definition of "well
characterized, non-coding regulatory region" has been deleted and
the following definitions of "non-coding regulatory region" and
"well-characterized" have been added to 725.3:

(1) The regulatory region and any inserted flanking nucleotides
do not code for protein, peptide, or functional ribonucleic acid
molecules.

(2) The regulatory region solely controls the activity of other
regions that code for protein or peptide molecules or act as recognition
sites for the initiation of nucleic acid or protein synthesis."

"Well characterized for introduced genetic material means that
the following have been determined:

(1) The function of all of the products expressed from the structural
gene(s).

(2) The function of sequences that participate in the regulation
of expression of the structural gene(s).

(3) The presence or absence of associated nucleotide sequences
and their associated functions, where associated nucleotide sequences
are those sequences needed to move genetic material including linkers,
homopolymers, adaptors, transposons, insertion sequences, and restriction
enzyme sites.

While EPA agreed with the suggestion to use the language in 725.421(b)
to define "well characterized", EPA did not use the definition of
"non-coding regulatory region" suggested by commenter #35 because
the definition did not include the specific requirement that both
regulatory regions and inserted flanking sequences be non-coding.

EPA developed the definition of "non-coding regulatory region"
based on language pertinent to the non-coding aspect of the definition
of "well-characterized, non-coding regulatory region" as originally
contained in 725.3 of the proposed rule. EPA believes that it is
necessary to specifically require that the regulatory regions be
non-coding. As stated in the 1986 policy statement and in the proposed
rule, EPA excluded from the definition of intergeneric microorganisms,
those microorganisms that solely contained intergeneric regulatory
regions that are well characterized and non-coding. Such intergeneric
material would not introduce distinctly new traits or new combinations
of traits. Rather, the level of expression of existing traits in
the recipient microorganisms may be altered. By also including a
restriction that the flanking sequences be non-coding, EPA is ensuring
that persons will consider the nature of the flanking sequences
associated with regulatory regions when determining their eligibility
for the well characterized, non-coding regulatory region exclusion.

EPA has determined that for this final rule it will not reconsider,
as requested by commenters #8 and 18, whether EPA should continue
to exclude from the definition of intergeneric, microorganisms that
result from the addition of material that is well-characterized
and contains only non-coding regulatory regions. Under 5 of TSCA,
EPA determines whether a chemical substance is "new", independently
of the determination that the chemical substance or microorganism
may present risks. As discussed above, in defining "new microorganism",
EPA focuses on the potential for expression of new traits or new
combinations of traits. Where only well-characterized, non-coding
regulatory material is transferred, no distinctly new traits are
introduced. Instead, quantitative changes in existing traits in
the recipient microorganism may occur. EPA recognizes that the insertion
of well-characterized, non-coding regulatory regions may result
in expression of previously cryptic regions. However, the genetic
material in cryptic regions is present in the recipient and could
be expressed in other members of the recipients species at any time
naturally. A microorganism expressing such material as a consequence
of the insertion of well-characterized, non-coding regulatory regions
would thus not be "new" under TSCA. In the proposed rule, EPA indicated
that it may choose to reconsider its interpretation of "new microorganism"
at a later time and in a separate rulemaking. The issue raised by
commenters #8 and 18 will be reconsidered at that time.

Of the 17 comments received on scope of oversight, only four commenters
strongly opposed the intergeneric scope and supported another approach,
while 13 commenters expressed some level of support for intergeneric,
albeit with some modifications. EPA believes that while there are
problems with the intergeneric scope, as one commenter noted, "no
one has proposed a clearly superior scope, despite years of discussion
and debate" (#12).

Except for the minor modification to the definitions of "intergeneric
microorganism," "well-characterized," and "non-coding regulatory
regions" discussed above, EPA will make no changes at this time
in its approach to defining new microorganisms subject to this final
rule. EPA has determined that a separate rulemaking is needed for
the development and implementation of significant modifications
to the intergeneric scope. Possible modifications to the intergeneric
scope need to be considered as a whole in order to develop an administratively
feasible approach based on the most recent scientific knowledge.
In addition, EPA believes that an additional opportunity should
be provided to the public for notice and comment.

4. Alternative approaches to scope

Comments:

EPA received nine comments (#8, 13, 18, 24, 26, 30, 35, 37, 39)
supporting a "risk-based" approach to scope of oversight. Five of
these commenters (#8, 18, 24, 26, 35) indicated that although they
understood the reason EPA has an intergeneric scope, they believe
that EPA should work on developing a more "risk-based" interpretation
focussing on the new phenotypic traits introduced into a microorganism.
Four commenters (#13, 30, 37, 39) opposed the focus on "new" microorganisms
and supported, instead, an approach based on "the characteristics
of the product, not on the process used to develop the product"
(#37).

EPA response:

As one commenter (#23) noted, "EPA has a need that is unique among
the federal agencies regulating biotechnology. While other federal
agencies must define 'risky' organisms as their threshold question,
EPA has a different requirement under TSCA: the need to define new
organisms." For the purposes of administering TSCA, EPA must decide
what constitutes a "new" microorganism. TSCA 3(9) defines a "new
chemical substance" as a substance not on the TSCA Inventory of
Chemical Substances compiled under TSCA 8. Naturally occurring substances
and substances derived from nature with limited human intervention
are not explicitly listed on the Inventory but are considered implicitly
to be on it, and thus are not "new." EPA believes that when genetic
material has been combined among source organisms from different
genera (intergeneric), the resulting microorganism should be considered
"new" because of the degree of human intervention involved, the
significant likelihood of creating new combinations of traits, and
the greater uncertainty regarding the potential risks of such microorganisms.

One commenter (#26) noted that "consideration of significant 'newness'
of an organism is a separate issue from the question of the risk
posed by the organism and that 'newness' is not necessarily the
appropriate criterion for determining the relative risk of the resulting
organism." EPA considers newness and risk in its TSCA 5 program
separately. TSCA 5 notification is triggered by "newness"; it is
not triggered by a determination that a risk is present. However,
EPA believes a scope based on intergeneric addresses some elements
of risk; because there is a significant likelihood that intergeneric
microorganisms will exhibit new traits or combinations of traits,
there is greater uncertainty regarding the behavior of such organisms
and their potential risk.

Once a notice has been received, risk is an important component
of the review process. EPA does not regulate new chemical substances
unless it determines that they may present an unreasonable risk
to health or the environment or where there will be substantial
production of the substance and significant or substantial exposure
to the substance. Once EPA has gained experience with or sufficient
information about certain categories of microorganisms, it may use
TSCA 5(h)(4) to develop exemptions from the reporting requirements
of 5. In developing its TSCA 5 program for microorganisms, EPA has
taken advantage of the flexibility afforded by TSCA 5(h)(4) to establish
exemptions which can be expanded as EPA gains additional experience
reviewing intergeneric microorganisms. These exemptions are discussed
in more detail below in Units III.C. and IV of this Response to
Comments document.

III. REPORTING GENERAL COMMERCIAL USE OF MICROORGANISMS

A. MCAN PROCESS

The proposed rule is based on procedures that had been originally
developed and promulgated for the TSCA 5 program for traditional
chemicals which EPA has operated for over a decade. For the convenience
of users, EPA proposed a new part in the Code of Federal Regulations
(CFR) which incorporates these procedures, and applies specifically
to microorganisms (Part 725). Procedures from parts 720 (premanufacture
notification) and 721 (significant new use notification) were placed
in the new part 725 with some minor modifications to accommodate
the specific characteristics of microorganisms. EPA indicated that
it was not seeking comment on the procedures in proposed part 725
that were incorporated from parts 720 and 721 without significant
modification.

In lieu of the PMN or SNUN described in part 720 and 721, respectively,
EPA proposed in part 725 a requirement for submission of a Microbial
Commercial Activity Notice (MCAN) by persons who intend to manufacture
or import new living microorganisms, and by persons who intend to
manufacture, import, or process microorganisms for a significant
new use. Because EPA proposed a separate, less burdensome reporting
process for R&D involving microorganisms (discussed in Unit
IV. of this document), EPA expects that the MCAN would be submitted
only for microorganisms for general commercial use. The purpose
of EPA's review of MCANs is similar to EPA's purpose in reviewing
Premanufacture Notices (PMNs) and Significant New Use Notices (SNUNs)
submitted for traditional chemicals. The purpose of a MCAN would
be to provide EPA with information necessary to identify and list
a microorganism on the TSCA Inventory (if the microorganism is new)
and to determine whether the microorganism may present an unreasonable
risk of injury to human health or the environment.

EPA received nine comments (#8, 18, 25, 26, 28, 33, 35, 37, 39)
on issues related to its notification processes for microorganisms
at general commercial use. Three commenters (#26, 33, 39) had general
comments about the process. Seven commenters (#8, 18, 25, 28, 33,
35, 37) had specific concerns about contract manufacturing, certain
information requirements for the MCAN process, and the inclusion
of requirements for byproducts.

1. General comments

Comments:

One commenter (#26) expressed support for the MCAN process, calling
it "an improvement over existing practices." Another commenter (#33)
suggested that it was time for EPA to "begin development of a standardized
form for microbial products subject to notification." A third commenter
(#39) indicated that its company followed the NIH Guidelines when
using recombinant microorganisms to produce microbial products for
general commercial use and was concerned that "numerous MCANs and
exemptions may be necessary for biotechnology firms who work with
a multitude of different intergeneric organisms."

EPA response:

EPA is not ready to develop a MCAN form at this time. With the
promulgation of this rule, EPA will be codifying information requirements
for biotechnology submissions for the first time. Thus, EPA's experience
with the MCAN is somewhat limited. In addition, as discussed in
other sections of this document, EPA plans to consider, at a later
time, further modifications to its interpretation that intergeneric
microorganisms are new chemical substances under TSCA 5. After EPA
has gained additional experience reviewing submissions under the
requirements of Part 725 and has completed its modifications to
other parts of its approach, EPA will consider developing a MCAN
form.

A commenter (#39) expressed concern that many MCANS would need
to be submitted by companies working with many intergeneric microorganisms.
EPA does not believe that this would be the case. Companies who
are developing a variety of related intergeneric microorganisms
may file "consolidated" MCANs for several microorganisms which are
similar in construction and use. A "consolidated MCAN" is defined
in 725.3. Persons who wish to manufacture or import two or more
related new microorganisms should contact a member of the biotechnology
staff in the New Chemicals Program at EPA to discuss the parameters
of submitting a single consolidated MCAN for the related microorganisms.
A consolidated MCAN cannot be submitted for an open-ended category
of microorganisms. The submitter must identify each new microorganism
individually, because each microorganism in the consolidated MCAN
will be assigned a separate MCAN number.

A consolidated MCAN is suitable for microorganisms with the same
or similar uses and for which there are similar test data or other
information. For example, EPA has received consolidated submissions
for intergeneric microorganisms when the submitters have developed
a series of microorganisms where the recipient microorganism and
the product use are the same but the introduced genetic material
has varied.

EPA will not accept a consolidated MCAN unless the submitter has
contacted EPA and obtained a prenotice agreement that the group
of microorganisms is sufficiently similar that they are suitable
for review in a consolidated MCAN. However, EPA encourages submitters
to submit consolidated notices when appropriate; such notices will
reduce the burden associated with preparing multiple 5 notices based
on similar or identical information. Additionally, the fee for a
consolidated MCAN is the same as that for one MCAN, $2500 (see 40
CFR 700.45(b)(2)(vi), revised as part of this rulemaking). Consolidated
MCANs also will facilitate the efficiency and consistency of EPA's
review by allowing the staff to review related microorganisms, and
the data and other information that are common to them, at the same
time.

Separate from use of a consolidated MCAN, submitters are encouraged
to identify related MCANs in their submissions and to provide the
basis for the claimed relationship. For example, a submitter preparing
a MCAN for a new microorganism where the recipient and/or donor
microorganisms have been reviewed in a prior submission to EPA may
refer to information in the earlier submission and does not need
to resubmit that information in the new MCAN.

2. Contract manufacturing

Comments:

One commenter (#39) had concerns about the applicability of the
proposed regulations to contract manufacturing:

In the case where LTI performs contract fermentation and/or purification
services for research products manufacturers, our customers may
not be regulated by another outside agency. Some or all of such
work may be covered by EPA regulations relating to R&D and production
of these types of products. However, LTI believes that it would
be both impractical and unduly burdensome for us to be required
to file certifications and applications to EPA; this responsibility
should fall to the commercial concern which intends to offer the
products for general commercial sale. The contractors should be
responsible for ascertaining what regulations apply to the construction
of intergeneric plasmids and/or strains because only they will have
detailed knowledge of the constructs which is necessary to determine
appropriate compliance measures.

Further, some of this information may be considered confidential
and will likely not be available to LTI.

It is our understanding that the above interpretation is the intention
of 725.105(a)(2), and we request that EPA provide confirmation to
that effect.

EPA response:

In response to the commenter (#39) who questioned how the proposed
regulation would apply to contract manufacturing, EPA notes that
the regulation at 725.105 adopts the same approach to contract manufacturing
of TSCA microorganisms as has been applied to contract manufacturing
of other TSCA-regulated chemical substances.

In general, it is the manufacturer of a new microorganism who is
required to submit the MCAN. However, where a person contracts with
a manufacturer to produce an intergeneric microorganism and otherwise
meets the conditions laid out in 725.105(a)(2), the person who has
contracted with the manufacturer will be required to submit the
MCAN. In such a case, the company that actually produces the intergeneric
microorganism is considered a contract or toll manufacturer and
the person with whom he or she has contracted (i.e., the contractor)
will be considered a manufacturer for 5 purposes. Although the toll
manufacturer will not be required to file the MCAN under 725.105(a)(2),
since both persons involved in the transaction are manufacturers,
both will be liable under TSCA 15 if manufacture of the new microorganism
commences before a MCAN has been submitted, or before the review
period has expired.

In order for a manufacturer to be considered a toll manufacturer,
the company must comply with all of the requirements in 725.105(a)(2).
Specifically, the manufacturer must produce or process the intergeneric
microorganisms exclusively for the contractor, and the contractor
must specify the identity of the microorganism and control both
the total amount produced and the basic processes for making the
microorganism.

Applying these requirements to the standard practices for microorganism
manufacture, the term "produce or process" can include both the
actual construction of the intergeneric microorganism, and/or growing
large quantities of the microorganism (fermentation). Also, the
term "specifies the identity of the microorganism" can include providing
the intergeneric microorganism as an inoculum for fermentation,
as well as providing detailed instructions for the actual construction
of the intergeneric microorganism.

An "exclusive" relationship with the toll manufacturer means that
the toll manufacturer does not sell or attempt to sell the microorganism
to anyone else. As a result the contractor will also determine the
total amount to be manufactured. Therefore, if more than one person
orders the new microorganism, neither of these persons will have
specified the total amount to be manufactured and neither is responsible
for submitting the MCAN; instead, the person who actually manufactures
the microorganism must submit the notice.

Although the contractor must specify the basic process for making
the microorganism, under 725.105(a)(2)(ii), the toll manufacturer
may adjust the specified process as necessary to adapt the process
to the toll manufacturer's own equipment. This situation would still
fall within the scope of 725.105 (a)(2), and the contractor would
be considered a manufacturer, responsible for submitting the MCAN.

This provision does not apply to the person who simply orders a
specific microorganism or a microorganism with certain properties
from a manufacturer. In that case, the person ordering the microorganism
would not be considered a manufacturer. Therefore, the actual manufacturer,
who would not in this case be functioning as a toll manufacturer,
would submit the MCAN.

EPA has included 725.105 to address the situation in which one
person decides to manufacture a specified amount of a microorganism
using a particular process, but contracts with a toll manufacturer
to actually produce the microorganism. In this case, EPA believes
that the person contracting with the toll manufacturer will be the
most knowledgeable party, and therefore he or she should be responsible
for submitting the MCAN. EPA recognizes, however, that the actual
(toll) manufacturer will often have extensive information that would
be useful to EPA in its review of the new microorganism. Therefore,
EPA strongly encourages joint submissions (see 725.25(e)) in this
situation.

With regard to the specific scenario posed by the commenter (#39),
assuming that the contractors for whom the commenter provides fermentation
and/or purification services meet the requirements of 725.105(a)(2),
it would be the contractor who would be required to submit the MCAN.
The commenter, however, would not be permitted to begin manufacture
until a MCANwas submitted and reviewed, or until the review period
had expired.

This discussion of contract manufacturing with respect to MCAN
reporting would also be applicable to reporting and record keeping
activities for commercial R&D activities for microorganisms.
The microorganism R&D requirements, which are found in subpart
E of part 725, are discussed in Unit IV. of this document.

3. Information requirements

Comments:

Six commenters (#8, 18, 25, 28, 33, 37) expressed concern about
the information to be included in the MCAN, indicating that the
requirements ( 725.155 and 725.160) were confusing and burdensome.
Two commenters (#8, 18) noted that:

The prospective EPA 'review that considers all (emphasis added)
the reasonable [sic] ascertainable information on...effects' can
be interpreted as open ended and subject to challenge both by submitters
and opponents to biotechnology. It would be better to review only
that information likely to be pertinent to the change in the phenotype
of the organism.

These commenters did not believe that testing should be required
unless there is existing evidence for concern. One commenter (#25)
noted that "there are a lack of acceptable and proven test protocols
for many of these studies. Furthermore, the significance and interpretation
of experimental results from many of these types of studies are
poorly understood and have not been clearly established." Another
commenter (#18) stated:

The information requested in the MCAN under genetic construction
(2) and phenotypic and ecological characteristics (3) are so encompassing
that it can be said that such information is not currently known
for any microorganism. This section should be amended to read, 'where
applicable to assessing the safety to humans and the environment,
the following information should be submitted'. The information
called for in this section will greatly help microbial ecologists,
and indeed plant pathologists, in understanding the microorganism
in question and its interaction with the environment, but have little
or no relevance to safety or commercialization.

EPA response:

In response to the commenters who stated that the information required
to be submitted in the MCAN was confusing, burdensome, and "open-ended
and subject to challenge by submitters and opponents of biotechnology,"
EPA notes that both the proposed and final rule require submission
only of the information that is explicitly required to be submitted
by TSCA sections 5(b) and (d). In order to reduce the information
that must be included in the MCAN, EPA would need to promulgate
an exemption under 5(h)(4). EPA does not currently possess the information
necessary to determine that it would not need to review the data
listed in 725.155(c) through (h) and 725.160, to assess the wide
variety of all potential new microorganisms in order to develop
information requirements tiered to reflect potential microorganism
characteristics.

The comments also reflected a substantial amount of confusion about
what 725.155(c) through (h) and 725.160 require. MCAN submitters
are only required to submit the data specified in 725.155(c) through
(h) to the extent it is known to the submitter, or insofar as it
is reasonably ascertainable, and to submit the data specified in
725.160 to the extent the test data are in the submitter's possession
or control. No requirements for specific tests are imposed by either
section.

At 720.3(p) "known to or reasonably ascertainable" is defined as
"all information in a person's possession or control, plus all information
that a reasonable person similarly situated might be expected to
possess, control, or know." EPA has incorporated this definition
in 725.3 by reference.

Cost and burden are factors in determining whether information
is known to or reasonably ascertainable by the submitter. EPA believes
that a detailed definition of "reasonably ascertainable" may result
in inequitable treatment of notice submitters. What would be a reasonable
effort for one company under certain circumstances might be extremely
burdensome for the same company under different circumstances, or
for another company in the same situation. The amount and type of
information meeting this definition will depend on the specific
circumstances surrounding the development of the new microorganism.
The nature of the recipient microorganism, the introduced genetic
material, the conditions of use, the projected sales volume and
profit, and the size of the company are factors in determining what
information can reasonably be obtained.

EPA believes that "reasonably ascertainable" can be defined only
on a case-by-case basis and that submitters must be responsible
for deciding when and how to obtain required data, and when required
information is not reasonably ascertainable. In most instances,
data-gathering that is so costly as to preclude commercialization
is not reasonable. To provide additional guidance to submitters,
EPA will continue to make its "Points to Consider in the Preparation
of Microorganism Submissions under TSCA" available to the public.
Additionally, as noted in the preamble to the proposed rule (59
FR 45530 (September, 1, 1994)), EPA recommends that potential submitters
begin discussion with EPA staff early in the submission planning
process so that EPA may provide guidance that is more specifically
tailored to the MCAN submission for the submitter's microorganism.

EPA's MCAN requirements at 725.155 and 725.160 were based entirely
on TSCA 5(b) and 5(d)(1). TSCA 5(d)(1)(A) requires that the notice
include the information described in subparagraphs (A), (B), (C),
(D), (F), and (G) of 8(a)(2) "insofar as known to the person submitting
the notice or insofar as reasonably ascertainable." The requirements
at 725.155 correspond to these subparagraphs. Section 725.155(d)
requires submission of microorganism identity information. This
corresponds to TSCA 8(a)(2)(A) which requires chemical identity
and molecular structure information. For intergeneric microorganisms,
the equivalent of chemical identity would include the taxonomic
designations (genus and species) of the recipient microorganism
and the donor(s) of the introduced genetic material as well as certain
phenotypic and genotypic information. Many taxonomic designations
at the species level define phenotypically and genotypically diverse
groups of microorganisms. Therefore, supplemental information on
phenotypic and genotypic traits is necessary to identify as precisely
as possible a specific microorganism for Inventory listing.

Section 725.155(e) requires a description of byproducts. This corresponds
to TSCA 8(a)(2)(D) which requires a description of byproducts. The
byproducts requirement is discussed further in this document in
Unit IV.A.4. Section 725.155(f) requires information about total
production volume. This corresponds to TSCA 8(a)(2)(C) which requires
information on the total amount of each substance manufactured or
processed. Section 725.155(g) requires a description of categories
of use and estimated production volume. This corresponds to TSCA
8(a)(2)(B) which requires information on the categories of use and
8(a)(2)(C) which requires reasonable estimates of the amount to
be manufactured or processed for each category of use. Section 725.155(h)
requires information on worker exposure and environmental release.
This corresponds to TSCA 8(a)(2)(F) which requires information on
the number of individuals who will be exposed to the substance and
duration of exposure.

Section 725.160(a) requires submission of "Test data on the new
microorganism in the possession or control of the submitter." This
corresponds to TSCA 5(d)(1)(B) which requires that the notice include
any test data in the possession or control of the submitter. Section
725.160(b) asks for "Other data concerning the health and environmental
effects of the new microorganism that are known to or reasonably
ascertainable by the submitter." This corresponds to 5(d)(1)(C)
which requires that the notice include a description of any other
data concerning the environmental and health effects of the substance
that are known to or reasonably ascertainable by the submitter.

The purpose of the MCAN is to supply EPA with information necessary
to identify and list the new microorganism on the TSCA Inventory
and to determine whether the microorganism would pose an unreasonable
risk to human health or the environment. In keeping with that objective,
EPA has revised 725.155(b) to explicitly include the statement that
the submitter include all reasonably ascertainable information that
will permit EPA to make a reasoned evaluation of the human health
and environmental effects of the microorganism. If EPA finds that
the information submitted in the MCAN is insufficient for EPA to
complete its review, it may request the submitter to provide the
additional information during the 90-day review period, or EPA will
take action under TSCA 5(e), where appropriate, to regulate the
substance pending submission of the information.

The MCAN information requirements closely parallel those for PMNs
and differ only to the extent necessary to accommodate the specific
characteristics of microorganisms. The introductory paragraphs in
725.155 have been revised to more closely parallel the introductory
language in 720.45, which contains the information requirements
for the PMN. Therefore, the first two paragraphs of 725.155 now
read as follows:

(a) Each person who is required by this part to submit a MCAN
must include the information specified in paragraphs (c) through
(h) of this section, to the extent it is known to or reasonably
ascertainable by that person. However, no person is required to
include information which relates solely to exposure of humans or
ecological populations outside of the United States.

(b) Each person should also submit, in writing, all other information
known to or reasonably ascertainable by that person that would permit
EPA to make a reasoned evaluation of the human health and environmental
effects of the microorganism, or any microbial mixture or article,
including information on its effects on humans, animals, plants,
and other microorganisms, and in the environment. The information
to be submitted under this subpart includes the information listed
in paragraphs (c) through (h) of this section relating to the manufacture,
processing, distribution in commerce, use, and disposal of the new
microorganism.

EPA disagrees with the commenter (#18) who stated that information
on genetic construction and phenotypic characteristics has little
or no relevance to safety or commercialization. In addition to its
use for identification and listing of microorganisms on the TSCA
Inventory (as discussed in the proposed rule preamble, 59 FR 45551-51),
EPA regards the information requested in 725.155(d)(2) "Genetic
construction of the new microorganism(s)" and (3) "Phenotypic and
ecological characteristics" as essential to the development of its
risk assessment for a new microorganism and pertinent to determining
the change in the phenotype of the new microorganism relative to
the parent microorganism. Information required in 725.155(d)(2)
would include a description of the genetic material introduced into
the intergeneric microorganism and will help predict the likely
behavior of the microorganism. For example, if genetic material
encoding resistance to an antibiotic were included in the genetic
construct, EPA scientists would evaluate the potential of the intergeneric
microorganism to affect clinical use of the antibiotic.

EPA agrees with the commenters (#8, 18) who suggested that EPA
review only information pertinent to the change in phenotype of
the microorganism. This is exactly what EPA does in its review;
however, in order to compare the behavior of the new microorganism
to that of the parent, EPA must have information on both the parent
and the new microorganism. For example, in its reviews of PMNs for
field tests of strains of Rhizobium meliloti genetically modified
for enhanced nitrogen fixation, EPA compared the behavior of the
new PMN strains to the behavior of naturally occurring rhizobia
to determine whether the new PMN strains were behaving within a
range of behaviors expected for naturally occurring rhizobia. EPA
looked at field test data on nitrogen-fixation, survival, and competitiveness
for the PMN strains but also needed the same information on naturally
occurring strains to make its comparison. To date, EPA has found
that in field tests, the PMN strains do behave within a range of
behaviors expected for naturally occurring strains. This finding
reduces uncertainty about the behavior of the PMN strains and has
contributed to EPA's recent determinations that field tests of the
PMN strains were not likely to present an unreasonable risk of injury
to health and the environment.

With regard to the commenters (#8, 18) who believe that testing
should only be required when there is existing evidence for concern,
EPA notes the distinction between the requirements of TSCA 5(d)(1)(B)
and 5(d)(1)(C). As discussed above, TSCA 5(d)(1)(B) instructs EPA
to ask for test data, but this is limited to test data in "the possession
or control of the submitter," whereas 5(d)(1)(C) instructs EPA to
ask for "a description of any other data concerning the environmental
and health effects of such substance, insofar as known to the person
making the notice or insofar as reasonably ascertainable." There
are no requirements for specific tests to be conducted and the results
submitted in the MCAN. However, if EPA finds that the information
in the MCAN is insufficient and the microorganism may present an
unreasonable risk or may be produced in substantial quantities which
may result in substantial or significant exposure, under TSCA 5(e)
EPA may issue an order prohibiting or limiting production and specifying
the type of information, including test data, that it needs to address
its concerns. Alternatively, EPA may issue test rules under TSCA
4 for specific chemical substances; however, to date EPA has not
used TSCA 4 for microorganisms.

EPA agrees with the commenter (#25) who noted the lack of acceptable
test protocols for many microorganism studies. EPA believes that
proven test protocols will become available as more experience is
gained in microbial ecology. In the meantime, EPA also believes
that while the interpretation of some experimental results may be
based on partial understanding of environmental microbial processes,
this does not mean that the information itself would not be useful,
at least qualitatively, in EPA's review. Such information will allow
EPA to develop the experience to devise validated testing procedures
in the future.

4. Byproducts

Comments:

Three commenters (#28, 33, 35) expressed concern about the inclusion
of byproducts in the 725.3 definition of "manufacture, import, or
process for commercial purposes" and the corresponding information
requirement at 725.155(e). These commenters stated the following:

"This is a gray area since many cellular products are produced
during a microbial fermentation. The vast majority of these compounds
are never characterized. Furthermore, these compounds should be
considered by EPA to be implicitly on the TSCA Inventory since they
are produced by the unmodified microorganism. We are unclear why
EPA has extended the definition to this category of substances.
If there are distinct health and safety issues associated with byproducts
they will be addressed during the MCAN review and are further subject
to section 8(e) reporting as appropriate. We recommend deleting
this subpart in the final rule."

EPA response:

Commenters expressed concern that in the proposed rule EPA had
"extended" the definition of "manufacture, import, or process for
commercial purposes" to include byproducts. However, the language
in the proposal is not an extension of the definition. The definition
of "manufacture, import, or process for commercial purposes" in
725.3 is adapted from the definition for "manufacture or import
for commercial purposes" at 720.3(r) which also includes byproducts.
Further, as noted above in Unit III.A.3., TSCA 5(d)(1)(A) requires
EPA to collect such information. Note, however, that the information
requirements for byproducts at 725.155(e) is limited to information
that is "known to or reasonably ascertainable" by the submitter.
Thus, to the extent that the submitter chooses to specifically identify
and characterize byproducts, that information must be submitted
to EPA.

B. SNUR

EPA indicated that while it was not proposing SNURs for any microorganisms
as part of the proposed rule, it was setting up the SNUR process
for microorganisms as part of the regulatory text.

Comments:

Two commenters (#28, 33) had concerns about the SNUR process and
stated "we caution EPA not to implement blanket SNURS. SNURS need
to be communicated clearly so that manufacturers will understand
their regulatory implication. Microbial products differ from traditional
chemicals and there should be separate rulemaking for SNURS."

EPA response:

EPA does not intend to implement "blanket" SNURs for microorganisms.
EPA intends to issue SNURs on a case-by-case basis, depending upon
the need to evaluate the risk of some microorganisms when the environment
of use is changed. To illustrate when a SNUR might be appropriate
for microorganisms, as part of the preamble to the proposed rule
EPA discussed an example of the kind of scenario that might trigger
SNUR reporting in the future. This example involved taking a microorganism
commonly used for terrestrial icemaking and developing this microorganism
for use in cloud seeding. EPA indicated that it believed that cloudseeding
would present a significantly different exposure scenario and risk
potential than terrestrial uses. Therefore, EPA might require SNUR
reporting prior to the use of the live microorganism for cloudseeding.
It was EPA's intent that this example give the public an idea as
to the differences in use that might cause EPA to consider issuing
a SNUR for microorganisms.

EPA agrees that SNURs need to be communicated clearly and for
that reason has proposed to use expedited procedures only in instances
where a TSCA 5(e) consent order has been issued and the SNUR is
consistent with the terms of the 5(e) order. If the SNUR conditions
differ from those of the 5(e) order, or in those cases where no
5(e) order has been issued, EPA will use notice and comment procedures
to explain the need for and specifics of the SNUR. The proposed
Subpart L of Part 725 incorporated the Significant New Use Rule
(SNUR) provisions from Part 721 with minor modifications to accommodate
the specific characteristics of living microorganisms. EPA is promulgating
Subpart L in the final rule with minor revisions, primarily to clarify
the relationship of Subpart L to the other subparts in part 725.
EPA has not yet proposed a SNUR for a specific microorganism.

C. TIERED EXEMPTION

EPA proposed, under TSCA 5(h)(4), the Tier I and Tier II exemptions,
which are an exemption from EPA review and an expedited EPA review,
respectively, for specific microorganisms under certain use conditions
at the general commercial use stage. The criteria defining eligibility
for Tier I and Tier II exemptions address: (1) the recipient microorganism;
(2) the introduced genetic material; and (3) physical containment
to minimize the numbers of microorganisms emitted from the manufacturing
facility.

Manufacturers meeting Tier I requirements will be completely exempt
from review by EPA. EPA proposed that manufacturers submit a one-time
certification statement to EPA 30 days prior to the first use at
a facility of a microorganism eligible for a Tier I exemption. Subsequent
uses of the same recipient microorganism would not require additional
notification to EPA, so long as the manufacturer complied with all
Tier I exemption conditions. Under the Tier I exemption requirements
at 725.424, manufacturers must identify the recipient microorganism
and certify that the company is complying with the introduced genetic
material criteria described in 725.421 and the containment requirements
described in 725.422. Manufacturers must maintain documentation
that the conditions of the exemption are met; see the record keeping
provisions of 725.65 and 725.450(d).

Like the Tier I exemption, the Tier II exemption also includes
the requirements for the recipient microorganisms at 725.420 and
the introduced genetic material at 725.421. However, EPA did not
specify containment standards for microorganisms qualifying for
the Tier II exemption. Therefore, submitters may choose containment
conditions that vary from those listed at 725.422, and these containment
conditions would be subject to expedited EPA review. EPA suggests
that submitters use as guidance for appropriate containment conditions
the standards set forth for Tier I procedures. Under the Tier II
exemption, submitters must submit a Tier II exemption request which
includes microorganism identity information (recipient microorganism
must be listed in 725.420), certification of compliance with the
introduced genetic material criteria described in 725.421, and process
and containment information. EPA would approve or deny the exemption
request within 45 days.

EPA received comments on issues related to the overall approach
to the tiered exemption as well as the requirements for the three
specific criteria defining eligibility for the tiered exemption.
Comments on each of the specific criteria will be addressed separately
following a discussion of more general comments.

1. General comments

Six commenters (#24, 28, 33, 34, 35, 39) generally supported the
establishment of the tiered exemption. Five of these commenters
(#28, 33, 34, 35, 39) made statements regarding administrative aspects
of the tiered exemption. Four of these commenters (#28, 33, 35,
39) suggested alternative approaches for the tiered exemption.

a. Administrative issues

Comments:

Two commenters (#34, 35) indicated that it is "excessive and unwarranted"
to require the submitter for a tiered exemption to certify that
he/she is "...including with this submission all test data in my
possession or control and a description of all other data known
to or reasonably ascertainable by me..." as stated in 725.25(b).
One commenter (#39) stated that a 30-day review was not necessary
and that companies working with organisms eligible for the Tier
I exemption should simply be able to document their eligibility
in their records. This commenter also suggested that EPA substitute
a 10 day EPA review for the 30 day review specified at 725.424(a)(4)
for the certification. This commenter also stated that for the Tier
I exemption, each institution should have its containment conditions
approved only once for each eligible recipient, regardless of the
introduced genetic material. Three commenters (#28, 33, 34) supported
EPA's decision not to implement users' fees for the Tier I and Tier
II exemptions.

EPA response:

For purposes of clarification, EPA is making several changes in
this final rule to 725.424, Requirements for the Tier I Exemption,
and 725.455, Information to be Included in the Tier II Exemption
Request. EPA believes some of these modifications better elucidate
the relationship between the certification statement at 725.25(b)
and these tiered exemptions.

With regard to the first change, in the 1994 proposal, EPA inadvertently
failed to reiterate at 725.455 the requirements dealing with waste
disposal and the certification statement, respectively, that were
listed at 725.424 (b)(4) and 725.424(b)(5). Therefore, in the final
rule for purposes of completeness and clarity, EPA lists at 725.455
the requirements dealing with waste disposal and the certification
statement as 725.455(e) and 725.455(f) respectively. EPA does not
believe reiteration of these requirements at 725.455 adds an additional
burden, because submitters must under other Federal and local requirements
have information about waste disposal of the microorganisms and
other biological waste. Section 725.25(b) requires the certification
statement and EPA reiterates this statement at 725.455(f) for the
convenience of the submitter.

With regard to the second change, EPA modifies the certification
statement at 725.424(b) and 725.455(f) to describe more clearly
the relationship between the certification statement at 725.25(b)
and the requirements at 725.424 and 725.455. The certification statement
at 725.25(b) reads as follows:

I certify that to the best of my knowledge and belief: The company
named in this submission intends to manufacture, import, or process
for a commercial purpose, other than in small quantities solely
for research and development, the microorganism identified in this
submission. All information provided in this submission is complete
and truthful as of the date of submission.

I am including with this submission all test data in my possession
or control and a description of all other data known to or reasonably
ascertainable by me as required by 40 CFR 725.160 or 725.260.

Section 725.25 describes general administrative requirements, with
725.25(b) describing certification requirements in general for persons
submitting to EPA. The first two sentences of this statement, therefore,
where the company indicates that it intends to manufacture the microorganism
identified in the submission and that all information is complete
and truthful, are applicable to all submitters. However, the last
sentence dealing with test data is not relevant to those persons
certifying under 725.424 and 725.455. Rather, this sentence is relevant
to persons preparing either the MCAN, who must meet the information
requirements at 725.160, or meet the information requirements at
725.260. To clearly indicate the status of test data for those entities
notifying for the tiered exemption, EPA has added a qualification
to the requirement on certification at 725.424 and 725.455, indicating
that certification of submission of test data is not required.

With regard to the third change, in order to emphasize the need
to know the identity of the recipient microorganism, EPA has reordered
725.424 so that the requirement at 725.424(b)(3)(i) in the proposal
becomes 725.424(b)(3) in the final rule. With this reordering, 725.424(b)(4)
(which deals with waste disposal in the proposal) becomes 725.424(b)(5)
in the final rule; 725.424(b)(5) (which in the proposal deals with
the certification statement) becomes 725.424(b)(6) in the final
rule. As revised, 725.424(b)(6) now reads as follows:

The certification statement required in 725.25(b). Certification
of submission of test data is not required for the Tier I exemption.

Similarly, 725.455(f) reads as follows:

The certification statement required in 725.25(b). Certification
of submission of test data is not required for the Tier II exemption.

EPA agrees with commenter #39 that EPA review is not necessary
for the Tier I exemption. Indeed, in making the 5(h)(4) finding
for the Tier I exemption (i.e., those microorganisms qualifying
for the exemption under the specified conditions of use present
no unreasonable risk), EPA makes the finding for the class and therefore
obviates the need for a case-by-case evaluation of risk. Under the
Tier I exemption, no data need be included in the submission for
EPA to review. Under the Tier I exemption, EPA receives a one time
certification that the submitter is complying with the criteria
set out for the exemption so that EPA can be informed of which companies
are taking the exemption. Once a manufacturer has sent in the certification
required by 725.424, subsequent uses of the same recipient microorganism
at the same or different facilities would not require additional
certification as long as the manufacturer is continuing to comply
with the introduced genetic material requirements of 725.421 and
the containment requirements of 725.422.

While EPA does not believe that an EPA risk evaluation review
is necessary each time microorganisms qualifying for the exemption
at 725.424 are manufactured, EPA believes that it is appropriate
for the Agency to be notified of which manufacturers are eligible
for and utilizing the exemption so that EPA can keep track of the
commercial use of new microorganisms, and respond to any public
inquiries. However, EPA also has decided that since the purpose
of the certification is to inform EPA that manufacturers are using
the Tier I exemption, such notification is not needed 30 days in
advance. Ten days in advance would be sufficient. Therefore, EPA
has revised the requirement at 725.424(a)(4) to read: "The manufacturer
or importer submits a certification described in paragraph (b) of
this section to EPA at least 10 days before commencing initial manufacture
or import of a new microorganism derived from a recipient microorganism
listed in 725.420."

In this final rule, EPA has decided not to require payment of a
fee for filing the Tier I certification or the Tier II exemption
request. See the amendment to 700.45(c).

b. Alternative approaches

Comments:

While generally supporting the tiered exemption, four commenters
(#28, 33, 35, 39) suggested alternative approaches and modifications
to EPA's three criteria. One commenter (#39) suggested that EPA
develop a multilevel facility certification program utilizing certification
levels which parallel the biosafety levels in the NIH Guidelines.
This commenter suggested that "[o]nce certified, a given facility
would be eligible for automatic exemption from proposed EPA notification,
certification, and filing requirements for activities using microorganisms
at or below its certification level."

One commenter (#35) suggested that the Tier II exemption be extended,
so that the requirements for recipient microorganism, introduced
genetic material and containment could all be used as guidance and
any of the three could be modified by the manufacturer. Two other
commenters (#28, 33) felt that instead of requiring performance
based standards for containment, EPA should utilize the Good Industrial
Large-Scale Practices (GILSP) criteria developed by the Organization
of Economic Cooperation and Development (OECD) found in the OECD
document "Recombinant DNA Safety Considerations" (Ref. 2). The commenters
believed that the OECD GILSP criteria place restrictions on the
characteristics of the resulting new organisms but do not place
additional requirements on containment.

EPA response:

EPA does not believe that the multilevel facility certification
program suggested by one commenter (#39) would allow the Agency
to appropriately discharge its responsibilities under TSCA 5 at
this time. TSCA addresses the manufacture and use of chemicals,
including new microorganisms, and does not regulate facilities as
such.

EPA does not believe that at this time it can develop a 5(h)(4)
exemption that would reduce both reporting requirements and EPA's
review, and which would allow a submitter to modify the recipient
microorganism and/or introduced genetic material as well as the
containment criteria. As discussed in the preamble to the proposed
rule (59 FR 45542 (September 1, 1994)), TSCA 5(h)(4) provides that
EPA may exempt by rule the manufacturer of any new chemical substance
from all or part of the requirements of 5, only if it determines
that activities involving the substance will not present an unreasonable
risk of injury to health or the environment. In developing 5(h)(4)
exemptions, EPA has found that the most suitable approach to making
the necessary factual findings is to define criteria describing
categories of substances that present low risk when used under specific
conditions, and which therefore will support reducing the statutory
reporting requirements.

To develop an exemption that did not involve EPA review, EPA had
to prescribe conditions so that the finding that the microorganism
"will not present an unreasonable risk" could be made a priori.
Placing conditions on the three key aspects of the new microorganisms
eligible for the exemption - i.e., the eligible recipient microorganisms,
the introduced genetic material, and the conditions of use, ensures
that the "no unreasonable risk" finding could be made for the microorganism
without EPA review.

EPA's criteria for the introduced genetic material do not limit,
except for certain toxin sequences, the types of characteristics
that can be introduced into the recipient microorganism. Therefore,
EPA believes it necessary to restrict such modifications to recipient
microorganisms known to be of low risk when used under the conditions
prescribed by the criteria addressing containment. The requirements
placed on the introduced genetic material primarily attempt to ensure
that developers know the functions of the introduced genetic material
and that it is poorly mobilizable. These requirements, in concert
with the level of safety associated with the recipient microorganisms,
ensure in part, that the resulting microorganisms will present low
or negligible risk . For the Tier I exemption which involves no
EPA review, the physical containment requirements provide the additional
measure of risk reduction necessary for making the requisite 5(h)(4)
finding. EPA developed the Tier II exemption because EPA realized
that in some circumstances the level of physical containment prescribed
in the Tier I exemption would not be appropriate or sufficiently
flexible, in light of the number of approaches to containment in
fermentation facilities. For this reason, EPA developed the Tier
II exemption for those submitters who needed more latitude in selecting
their containment conditions. The list of eligible microorganisms
and the criteria defining the introduced genetic material are the
same as in the Tier I exemption. Thus, EPA need only evaluate whether
the conditions of containment are appropriate for the microorganism
being used to ensure that the finding of "will not present an unreasonable
risk" required by 5(h)(4) is made.

When there are no specific criteria which allow EPA to make an
a priori finding regarding unreasonable risk, EPA must review the
specific conditions surrounding the microorganism and its use in
order to make the finding required under TSCA 5. Therefore, the
more changes in specified criteria that are allowed, the closer
the reporting and review process resembles that followed for a MCAN.
EPA believes that it is more appropriate for industry, and more
understandable by the public, to have exemptions such as the Tier
I and Tier II exemptions which are clearly delineated and represent
an obvious reduction in burden relative to the MCAN.

With regard to the commenters' (#28, 33) suggestions that EPA
use the OECD GILSP criteria, EPA's approach to the tiered exemption
is consistent with the OECD GILSP. The three criteria which define
the tiered exemption are based in large measure on the OECD GILSP.
For the recipient microorganisms, EPA considered points also contained
in GILSP when it selected candidates which have "a long history
of safe use," "are not pathogens in the condition of use," and "are
limited in their ability to survive in the environment and cause
adverse environmental effects." Likewise, for the introduced DNA,
the tiered exemption uses the same limitations as GILSP, namely
well characterized, limited in size, and poorly mobilizable. Both
the tiered exemption and GILSP also prescribe performance-based
standards for containment.

Unlike GILSP, EPA did not place separate requirements on the resulting,
new microorganism. EPA believed such requirements would be unnecessary
because placing restrictions on the recipient microorganisms and
the introduced genetic material that could be used would result
in "new" microorganisms that meet the GILSP criteria, including
the GILSP requirement that the resulting microorganism be non-pathogenic.

EPA's decision not to adopt the GILSP restrictions on the new
microorganism was also based on its belief that the GILSP requirements
that the resulting microorganism be non-pathogenic and as safe as
the host organism do not, as stated, provide the type of uniform,
enforceable requirements necessary for a 5(h)(4) exemption. EPA
does not believe that the term "pathogenic" can be defined in a
way that would avoid the necessity of a case-by-case review, which
would defeat the purpose of the Tier I exemption and therefore would
not be appropriate for the Tier I exemption. Subsequent to publishing
the 1986 policy, EPA charged its Biotechnology Science Advisory
Committee (BSAC) with developing a definition of "pathogen" which
could be used in biotechnology regulations. This proved to be so
difficult that the BSAC recommended that EPA abandon its attempts
(Ref. 1A). Therefore, EPA did not utilize in the TSCA context an
approach that codified a requirement to determine pathogenicity
or non-pathogenicity. Instead, EPA has addressed that concept on
a case-by-case basis in its selection of candidate microorganisms
for the tiered exemption.

To develop a 5(h)(4) exemption from EPA review, EPA needed more
specific criteria than the guidance offered in GILSP. Because the
characteristics of the recipient microorganism determine for the
most part the parameters of the behavior of the new microorganism,
EPA believes that the eligible recipient microorganism should be
carefully defined. While EPA used some of the criteria described
by OECD, such as history of safe industrial use, EPA believes that
the greatest reduction in risk is obtained by listing as eligible
for exemption specific microorganisms known to be low risk as EPA
has done at 725.420. EPA also spelled out requirements for the introduced
genetic material and conditions of containment, both to make the
approach uniform and enforceable, and to ensure that the "will not
present an unreasonable risk" standard of 5(h)(4) is met.

2. Recipient microorganisms

Six criteria were used by EPA to determine eligibility of recipient
microorganisms for the tiered exemption: (1) it should be possible
to clearly identify and classify taxonomically the microorganisms
using available genotypic and phenotypic information; (2) information
should be available to evaluate the relationship of the eligible
recipient microorganisms to any other closely related microorganisms
which have a potential for adverse effects on human health or the
environment; (3) there should be a history of safe commercial use
for the microorganisms; (4) the commercial uses should indicate
that the microorganisms' products might be subject to TSCA; (5)
studies are available from which EPA can judge the potential for
the microorganisms to cause adverse effects; and (6) studies are
available from which EPA can judge the survival characteristics
of the microorganisms in the environment. A risk assessment, which
considered the six criteria, was prepared for each microorganism
listed at 725.420.

After completion of the risk assessments, a decision document
was prepared for each microorganism listed at 725.420. This decision
document considered the potential risks of the recipient microorganisms
as discussed in the risk assessments, and the potential risks from
the resulting intergeneric microorganisms eligible for the Tier
I and Tier II exemptions. To evaluate the potential for an unreasonable
risk of injury to health or the environment in making the 5(h)(4)
determination for these exemptions, EPA focused primarily on the
characteristics of the recipient microorganisms. If the recipient
microorganism was shown to have little or no potential for adverse
effects, introduced genetic material meeting the specified criteria
would not likely significantly increase the potential for adverse
effects. As further assurance that risks would be low for the Tier
I exemption, EPA is specifying containment conditions for minimizing
the number of microorganisms released from the facility. For the
Tier II exemption, EPA will review the containment conditions used.
EPA found that when balanced against resource savings for society
and expected product benefits, these exemptions will not present
unreasonable risks. The full risk assessments and the decision documents
for the recipient microorganisms listed at 725.420 were included
in the rulemaking docket and were made available for public review
and comment.

Five commenters (#8, 18, 28, 33, 35) had concerns about the taxonomy
criterion. Three commenters (#28, 33, 35) specifically asked that
EPA recognize that microbial taxonomy is constantly changing. One
of the three (#35) suggested that EPA consider the taxonomic designation
used for eligible recipients to be inclusive of any taxa listed
under historical or future revisions of the genera, as long as the
microorganism lineage can be appropriately documented.

Two commenters (#8, 18) asked for clarification as to whether all
six criteria must be met for a recipient to qualify for the exemption,
since it appeared to those commenters that some of the ten candidate
microorganisms did not meet all six criteria. These two commenters
also were concerned about the history of safe use criterion. They
indicated that, depending on the interpretation, a species might
be considered historically safe but specific strains of that species
may not have a history of safe use. These commenters sought clarification
about the eligibility for all strains within a species qualifying
for the exemption.

One commenter (#12) specifically indicated support for the criterion
requiring the existence of studies concerning the potential for
adverse effects and the survival characteristics of recipient microorganisms.
This commenter questioned whether all ten recipient microorganisms
were debilitated when used in fermentation processes. The commenter
suggested that EPA should consider an additional criterion, i.e.,
studies which document whether the ten candidates are debilitated.

EPA response:

EPA received no substantive comments either challenging EPA's approach
to selecting recipient microorganisms for listing, or questioning
the eligibility of the 10 microorganisms proposed as candidates
for listing. Therefore, EPA has not made substantive changes to
its approach to selecting recipient microorganisms. Section 725.420
continues to list the 10 microorganisms as eligible for use in the
tiered exemption. However, in response to comments, EPA is providing
additional explanation as to how the six criteria are used together
to determine a microorganism's eligibility for listing at 725.420.

One of the criteria used for selection of candidate microorganisms
for the tiered exemption is clear identification and classification
that enable the microorganisms to be assigned without confusion
to an existing, easily recognized taxon. EPA believes that it is
necessary to have an unambiguous and accurate description for the
new microorganism. EPA recognizes that microbial taxonomy is constantly
changing, and that modifications in taxonomic organization such
as those recently seen for Bacillus and Pseudomonas may be expected
in the future. EPA does not believe such reorganizations need affect
the tiered exemption.

The risk assessments for the candidate microorganisms evaluated
the hazards of the candidate microorganisms as they were appropriately
designated taxonomically in 1994. If in the future the taxonomic
designation of one of the recipient microorganisms changes, the
microorganism evaluated in 1994 will still be exempt, even though
it may possess a new name. For example, although the bacterium formerly
designated as Pseudomonas cepacia is currently called Burkholderia
cepacia due to advancements in analysis of genetic relatedness,
the phenotypic characteristics of the microorganism have not changed,
the available literature on the hazards associated with this microorganism
has not changed, nor has the potential risk associated with its
use, regardless of the new taxonomic designation.

EPA recognizes that a new taxonomic placement could affect the
evaluation of the relationship of the microorganism to any other
closely related microorganisms that may have a potential for adverse
effects on human health or the environment, which is the second
criterion used for selection of the recipient microorganisms for
this tiered exemption. However, even if a change in taxonomic designation
for the recipient microorganisms places them in taxa containing
pathogens, the characteristics of the recipient microorganisms will
remain unchanged.

EPA does not agree with the commenter (#35) who suggested that
taxonomic designation used for eligible recipients be inclusive
of any taxa listed under historical or future revisions of the genera.
The risk assessments were conducted on the species as they were
designated at the time of the assessments in 1994. Microorganisms
that were historically subsumed under one species name, but were
not considered members of that species in 1994 when the risk assessments
were prepared, would not have been reviewed by EPA during the preparation
of the assessments. EPA evaluated all members of species of which
each eligible microorganism belonged as of 1994. Thus, EPA will
not accept historical taxonomic designations for the microorganisms
listed at 725.420.

On the other hand, if a taxonomic change does occur in the future
for any of the recipient microorganisms listed at 725.420, companies
will need to demonstrate and document in their records that the
microorganism being used under the tiered exemption would have been
classified using a name listed in 725.420 at the time that EPA completed
the risk assessment for that microorganism. For example, if in the
future the name is changed for one of the ten microorganisms currently
listed in 725.420, submitters would need to document that their
microorganisms would have been classified in 1994 under the name
listed in 725.420. Submitters should consult the "Identification
and Taxonomy" section of the individual Risk Assessments for a detailed
discussion of the taxonomy of each of the microorganisms listed
in 725.420.

EPA wishes to clarify that a microorganism which is a candidate
for exemption would not necessarily be eliminated from consideration
if it did not meet all six criteria. In preparing the list of exemption
candidates included in the final rule at 725.420, EPA considered
all of the criteria together to determine whether, on balance, the
facts supported a determination that the candidates would not present
an unreasonable risk of injury to human health or the environment.
For example, not all strains of the species E. coli were proposed
for exemption because some strains are pathogens and therefore,
the species as a whole did not meet the criteria. On the other hand,
the strain E. coli K-12 did meet the criteria and was retained as
a candidate for the exemption. For other cases, mitigating factors,
such as the usual fermentation techniques known to be used with
A. oryzae, limited concern for A. oryzae under those use conditions.
Even though the risk assessment recognized the potential for toxin
production by some members of the A. oryzae species, procedures
generally employed in commercial production were found to minimize
the concerns. When taken together, the criteria applied to the candidates
proposed by EPA during the evaluation led to a conclusion that the
candidate microorganisms warranted exemption. EPA intended that
the ten risk assessments, in conjunction with the proposed rule,
would illustrate how microorganisms with diverse characteristics
could qualify for the exemption. Commenters should consult EPA's
final decision documents and risk assessments for additional guidance
on the way the Agency used the six criteria to evaluate potential
risk.

The history of safe use criterion was a major consideration in
the selection of candidates for the proposed tiered exemptions.
EPA chose species or strains that had significant commercial utility
and with which there had been considerable commercial experience
without incidence of adverse effects on human health or the environment;
the history of safe use mitigated uncertainty about the potential
risks posed by the microorganisms under conditions of commercial
fermentation. The microorganisms' history of safe use was balanced
against the other five criteria in the risk assessments conducted
on these ten recipient microorganisms. In some cases the commercial
experience was limited to a specific strain within a species and
did not apply to all strains within that species. However, the risk
assessments, which considered the potential adverse effects to human
health and the environment along with the potential worker and environmental
exposure, were conducted for the most part on the entire species
of which the candidate microorganisms were a member. The only exception
was the risk assessment for E. coli K-12 which considered only this
specific strain of the species. The species E. coli did not meet
the low risk test posed by the six criteria, and therefore the species
was not proposed for the tiered exemption.

EPA wishes to further clarify its thinking on two of the six criteria
used to determine eligibility of recipient microorganisms for the
tiered exemption: the availability of studies which can be used
to evaluate the potential for the microorganism to cause adverse
effects on human health and the environment; and the availability
of studies which can be used to evaluate the survival characteristics
of the microorganism in the environment. EPA is not suggesting that
a manufacturer proposing a microorganism for addition to the list
at 725.420 be required to perform hypothesis testing to ascertain
the potential for adverse effects on human health or the environment,
or the survival characteristics in all environmental media. Rather,
EPA is emphasizing that for a candidate microorganism for inclusion
on the list at 725.420, enough needs to be known concerning the
environmental behavior of the recipient microorganism to make a
judgement concerning its potential risk to the environment. Such
knowledge might be gathered through specific testing of the recipient
microorganism, or through available scientific literature on the
same species or strain. Knowledge of the survival characteristics
and the potential for members of the species to cause adverse effects
on human health or the environment is necessary in order for EPA
to prepare the risk assessment needed to evaluate the eligibility
of the recipient microorganism for the tiered exemption. This information,
when used in conjunction with the other criteria at 725.421 and
725.422, is important to the determination that the recipient microorganism
will not present an unreasonable risk of injury to human health
and the environment.

There is no criterion requiring candidate recipient microorganisms
on the list at 725.420 to be debilitated. Microorganisms used in
industrial fermentation are often debilitated, either intentionally
for proprietary reasons or because they have become acclimated to
the optimal growth conditions of the fermentation systems. Therefore,
these microorganisms would, most likely, exhibit reduced survival
in the environment relative to environmental isolates of the same
species. EPA considered the potential for survival of the microorganisms
in the environment in the risk assessments conducted in support
of the tiered exemptions and will consider the issue in assessing
future candidates.

b. Amending the list of candidates

Comments:

Six commenters (#24, 28, 33, 34, 35, 39) generally supported provisions
to allow additional recipient microorganisms to be added to the
candidate list at 725.420. Two commenters (#34, 35) supported EPA's
petition provisions at proposed 725.67 which allow the public to
propose additional candidates. Three commenters (#28, 33, 35) indicated
a desire to propose additional candidates and sought guidance on
this process. Two commenters (#24, 39) suggested specific candidates
to be added to the list at 725.420.

Two commenters (#13, 35) had questions about specific candidate
microorganisms. One commenter (#35) asked EPA to clarify whether
the microorganism Bacillus amyloliquefaciens would be considered
a variant of the listed candidate Bacillus subtilis and thus eligible
for the tiered exemption. Another commenter (#13) asked that EPA
add Pseudomonas fluorescens as an additional recipient microorganism
eligible for the tiered exemption. This commenter expressed the
opinion that the containment they employed and the limitations on
the genetic material they introduced into certain of their products
would make their products eligible for the Tier I exemption if P.
fluorescens was listed as a recipient microorganism.

EPA response:

Petition process. EPA supports the concept of adding additional
candidates to the list at 725.420 of microorganisms eligible for
the tiered exemption. As EPA gains additional experience reviewing
intergeneric microorganisms, it will continue to use its authority
under TSCA 5(h)(4) to develop exemptions for low risk microorganisms.
However, the petition process at 725.67 can also be used by the
public to propose candidates for inclusion on the list at 725.420,
and to provide the appropriate supporting information. The risk
assessments and decision documents included in the docket intended
to serve as models to the public of the level of information necessary
to support petitions of eligibility for listing microorganisms at
725.420. As a general matter, however, EPA expects that petitions
to add specific recipient microorganisms to the list at 725.420
will ideally be preceded by several MCANs which would provide relevant
experience with, and information on, the microorganism. This accumulated
experience should provide EPA with sufficient information following
receipt of a petition to determine whether the recipient microorganism
should be listed as a candidate for the tiered exemption.

The petition process was designed to be used by anyone seeking
to apply for a 5(h)(4) exemption from full MCAN reporting under
TSCA 5. The provisions at 725.67(a)(2) indicate that petitioners
should provide information to show that activities under the requested
exemption will not present unreasonable risk of injury to health
or the environment. This would include a description of the benefits
of the new microorganism and the economic consequences of granting
or denying the exemption. EPA has revised the regulatory text for
the petition process at 725.67 generally to clarify that the information
included in a petition will mirror the information requirements
for the provision for which the exemption is being sought. This
revised regulatory text reads as follows:

(3) Specific requirements. In addition to the requirements of paragraph
(a)(2) of this section, the specific information requirements of
the relevant subpart under which the exemption is sought should
be met.

(i) Exemption from MCAN reporting under subpart D. Information
requirements are set forth in 725.155 and 725.160.

(ii) Exemption from TERA reporting under subpart E. Information
requirements are set forth in 725.255 and 725.260.

(iii) Listing a recipient microorganism as eligible for exemption
under subpart G. Information regarding the following criteria should
be addressed in an application to list a recipient microorganism
under 725.420:

(A) Identification and classification of the microorganism using
available genotypic and phenotypic information;

(B) Information to evaluate the relationship of the microorganism
to any other closely related microorganisms which have a potential
for adverse effects on human health or the environment;

(C) A history of safe commercial use for the microorganism;

(D) Commercial uses indicating that the microorganism products
might be subject to TSCA;

(E) Studies which indicate the potential for the microorganism
to cause adverse effects to human health or the environment; and

(F) Studies which indicate the survival characteristics of the
microorganism in the environment.

Specifically, with regard to the tiered exemption, EPA has indicated
at 725.67(a)(3)(iii) that when applying to list a recipient microorganism
for the tiered exemption under 725.420, persons should include information
addressing the six criteria, discussed above in Unit III.C.2.a.,
which EPA used to evaluate microorganisms for listing. Persons who
wish to propose other microorganisms as candidates for exemption
under subpart G of these regulations are encouraged to use the risk
assessments and decision documents in the docket as models to develop
their petitions under 725.67(a)(3)(iii), as well as to consult with
EPA regarding the preparation of their petitions.

Bacillus amyloliquefaciens. EPA wishes to clarify that the tiered
exemption applies only to the recipient microorganisms currently
listed in 725.420. EPA does not believe that Bacillus amyloliquefaciens
should be subsumed under the exemption for Bacillus subtilis. B.
amyloliquefaciens may have been considered a variant of B. subtilis
in the past; however, by the time the risk assessment for B. subtilis
was developed in 1994 and when this Response to Comments document
was written, B. amyloliquefaciens had been given separate species
status from B. subtilis (Ref. 3). Therefore, B. amyloliquefaciens
is not synonymous with B. subtilis, and EPA cannot include the former
under the exemption for the latter. The risk assessment for B. subtilis
does not extend to B. amyloliquefaciens, because it was not evaluated
in the B. subtilis assessment. However, if the commenter believes
that B. amyloliquefaciens warrants an exemption based on the criteria
EPA used to evaluate B. subtilis, EPA invites the commenter, or
anyone else, to examine the risk assessment prepared for exemption
of B. subtilis, and utilizing this assessment as a model for the
issues important for eligibility, provide information to EPA supporting
a separate listing for B. amyloliquefaciens as a recipient microorganism
under 725.420.

Pseudomonas fluorescens. A commenter (#13) proposed the species
Pseudomonas fluorescens as a candidate for the tiered exemption
in comments submitted on the proposed rule. Therefore, EPA is responding
to this item as a rule comment and not as a formal petition. EPA's
response also further illustrates the approach to considering eligible
candidates. As discussed above in this section, commenters are referred
to the process outlined in 725.67(a)(3)(iii) of the final rule,
as well as the risk assessments and decision documents in the docket.
The risk assessment is conducted on the naturally occurring recipient
microorganism. Once a recipient microorganism has been determined
to present a low risk, EPA further determines that use of introduced
genetic material meeting the criteria at 725.421, and containment
conditions meeting the criteria at 725.422 for Tier I or reviewed
by EPA for Tier II, will provide additional assurance that the risks
will remain low.

EPA does not agree with the commenter (#13) who suggested that
the species Pseudomonas fluorescens is an appropriate candidate
for the tiered exemption at this time. As discussed above in this
section, EPA selected the microorganisms proposed for this exemption
by balancing together six criteria to estimate the overall risk
of the recipient microorganisms. Although the proposed candidate
microorganisms are not required to meet each of the six criteria,
on balance, the facts must support the finding that under the conditions
of the exemption, the microorganism will not present an unreasonable
risk of injury to health or the environment. When EPA considered
the information referenced by the commenter (#13) as well as information
available from risk assessments EPA has prepared during PMN reviews
involving strains of P. fluorescens, EPA did not agree that the
species P. fluorescens on balance met the six criteria.

The taxonomy of the genus Pseudomonas is quite complicated and
is constantly evolving with further research in phylogenetic relatedness.
According to Palleroni (Ref. 4), the species P. fluorescens is quite
heterogeneous. Within the fluorescent pseudomonad supercluster,
there are five separate biovars of P. fluorescens, I-V, (biovars
I-III formerly Biotypes A-C; biovars IV-V, formerly Biotypes F-G)
two biovars (A and B) of P. putida, P. chlororaphis and P. aureofaciens
(formerly P. fluorescens Biotypes E and D, which are now considered
synonymous), P. lundensis and P. fragi (Ref. 5). According to Molin
and Ternstrom (Ref. 6), "there are obvious problems in drawing lines
of demarcation between the different biovars of the P. fluorescens-P.
putida complex, as well as between the different subclusters of
the P. fragi complex". On a phenotypic basis, there exist various
continua within the two complexes (Ref. 6). Likewise, Hildebrand,
et al., (Ref. 7) also showed the presence of continua based on DNA-DNA
hybridization studies.

In addition, the species P. fluorescens poses concern relative
to the fifth criterion - the ability of the microorganism to adversely
affect human health or the environment. Recently, members of the
species P. marginalis, which are plant pathogens, were incorporated
into the species P. fluorescens Biovar II on the basis of DNA homology
(Ref. 5). There are a number of oxidase-positive fluorescent pseudomonads
that are capable of soft-rotting a number of plants such as carrots,
cabbage, celery, onion, cucumber, cauliflower, lettuce, potato,
chicory, fennel, leek, garlic, and hyacinth (Ref. 9). Currently,
soft-rotting strains of fluorescent pseudomonads cannot be distinguished
from nonsoft-rotting, oxidase-positive strains that are not plant
pathogens except for their ability to cause soft rot. However, the
common test of potato tuber maceration as an indication of soft-rot
producing ability has been shown to be unreliable as an indicator
of ability to cause soft rot in other plants (Ref. 9). Saprophytic
and phytopathogenic strains are scattered throughout Biovar II (Ref.
10).

In addition, the history of safe use criterion has not been met.
Although a particular company may have a few years of experience
with a particular strain, a single strain is not representative
of the entire species. The tiered exemption was not designed primarily
for particular proprietary strains, but was intended for species
that were widely available, widely used strains with decades of
commercial use in the fermentation industry. The tiered exemption
is not intended to be a replacement for a MCAN review of particular
strains from a particular company.

In summary, EPA's conclusion after review of the information supplied
by commenter #13, and that referenced above is that the species
P. fluorescens is not eligible for listing as a recipient microorganism
under 725.420 at this time for the following reasons: its confusing
taxonomic status; its lack of history of safe commercial use; and
the potential of some strains currently classified as P. fluorescens
to cause adverse effects on human health and the environment, particularly
in relation to plant pathogenicity. EPA's review does not represent
a full consideration of the eligibility for exemption of the species
P. fluorescens, however, because sufficient information to perform
an evaluation has not been submitted to the Agency.

3. Introduced genetic material

For the introduced genetic material, EPA identified four requirements
in 725.421 which must be met to qualify for the Tier I or Tier II
exemptions: the introduced genetic material must be (a) limited
in size, (b) well characterized, (c) poorly mobilizable, and (d)
free of certain sequences. Comments received on these four conditions
will be discussed in separate sections below.

Because EPA has determined that a definition of "new" based on
intergeneric microorganisms is appropriate, EPA has provided the
responses to comments on the criteria for the introduced genetic
material within the context of the intergeneric scope. The terms
used in the regulatory text for the tiered exemption should also
be interpreted in this context. While the term "introduced genetic
material" may apply scientifically to both intergeneric and intrageneric
genetic material, only the intergeneric portions of the introduced
genetic material must meet the requirements at 725.421. Therefore,
all terms associated with requirements in 725.421 refer solely to
the introduced genetic material which is derived from an organism
classified in a different genus from the recipient microorganism.

a. Limited in size

The requirements for the "limited in size" criterion are set forth
at 725.421(a) which states that the introduced genetic material
must consist only of the following: (1) The structural gene(s) of
interest; (2) The regulatory sequences permitting the expression
of solely the gene(s) of interest; (3) Associated nucleotide sequences
needed to move genetic material, including linkers, homopolymers,
adaptors, transposons, insertion sequences, and restriction enzyme
sites; (4) Nucleotide sequences needed for vector transfer; and
(5) Nucleotide sequences needed for vector maintenance. EPA discussed
its rationale supporting the limited in size criterion in the preamble
to the proposed rule (59 FR 45547 (September 1, 1994)).

Comments:

EPA received 5 comments (#25, 28, 33, 34, and 35) on its "limited
in size" requirements. These comments were generally concerned with
clarifying which vector sequences would meet the criterion, including
the status of certain sequences found in well-known, frequently
used plasmids.

Five commenters (#25, 28, 33, 34, and 35) sought clarification
as to which vector sequences would meet the "limited in size" criterion.
They were concerned about the status of vector sequences which were
derived from a microorganism belonging to a different genus than
the "new" microorganism subject to TSCA, which were needed to transfer
and/or maintain the introduced genetic material in "intermediate"
microorganisms other than the final TSCA-subject microorganism.
These vector sequences, although necessary in the "intermediate"
host microorganism, would not be needed or expressed in the final
microorganism intended to be used under the tiered exemption. The
commenters questioned whether such intermediate host vector sequences
would meet the limited in size criterion. Two methods were proposed
by commenters to address intermediate host vector sequences: (1)
the criteria at 725.421 should be interpreted to include host vector
sequences expressed in intermediate hosts and necessary for transfer
and/or maintenance in those hosts and thus these sequences would
be considered necessary for vector maintenance or transfer; and/or
(2) a list of low risk vectors that could be used with the recipient
microorganisms could be added to 725.420. Such a list could be based
on Appendix E of the NIH Guidelines.

Two commenters (#28 and 33) raised one additional vector-related
question. Some well-characterized and commonly-used vectors such
as pBR322 have sequences (antibiotic resistances, and others) that
do not prima facie meet the criteria at 725.421. Moreover, these
intermediate vector sequences may be expressed in the TSCA-subject
microorganism. For example, the pUC series of plasmids is approximately
1.3 kb smaller than pBR322, yet pUC plasmids are transferred and
maintained as well as pBR322 in some bacteria. The commenters asked
whether this meant that pBR322 would not meet the criteria at 725.421,
since pBR322 contains sequences beyond those essential for transfer
and maintenance. These commenters suggested that either the limited
in size criteria be expanded to allow for expressed intermediate
vector sequences, or a list of vectors meeting the limited in size
requirement at 725.421(a) be provided.

EPA response:

Concerning vector sequences necessary for transfer and/or maintenance
in an intermediate host but not expressed in the TSCA-subject microorganism,
the requirement for the introduced genetic material at 725.421(a)(3)
allows "Associated nucleotide sequences needed to move genetic material,
including linkers, homopolymers, adaptors, transposons, insertion
sequences, and restriction enzyme sites". EPA interprets this requirement
to allow the introduced genetic material to contain vector material
needed for maintenance in and/or transfer to intermediate hosts,
provided this vector material is not expressed in the intergeneric
microorganism that will be manufactured under the tiered exemption.
Such nonexpressed vector material should not change the behavior
of the TSCA-subject microorganism.

The additional issue raised by commenters concerned vector sequences
which are expressed in the new microorganisms and are part of recognized
host-vector systems. The NIH Recombinant DNA Advisory Committee
has, over the years, developed and been guided by concepts similar
to the criteria EPA used to evaluate the risks of the introduced
genetic material under 725.421. The NIH Guidelines Appendix E list
of certified host-vector systems and Appendix I list of biologically
contained host-vector systems are examples of the use of these concepts
to qualify risk (Ref. 11). Specific combinations of hosts, plasmids,
and phages listed in these Appendices are exempt from the NIH Guidelines.
The rationale underlying this exemption is based on the high degree
of biological containment offered by these host-vector combinations.
For example, for host-vector systems in which the vector is a plasmid,
the NIH Guidelines specifies that the frequency of mobilization
of plasmids in Appendices E and I is no more than 10-8. Because
the EPA criteria are based on the concepts originated by the NIH
RAC, EPA believes that pBR322, and other plasmid and phage vectors
listed in Appendices E and I of the NIH Guidelines would meet the
introduced genetic material criteria at 725.421, including the limited
in size criteria (Refs. 12, 13, 14). The specific vectors appropriate
for use with the EPA candidate microorganisms Bacillus subtilis,
Escherichia coli K-12, and Saccharomyces cerevisiae are listed in
Appendices E and I of the NIH Guidelines (Ref. 11). EPA anticipates
that when additional microorganisms are added to the EPA recipient
microorganism list at 725.420, the associated vectors listed by
NIH as part of host-vector pairs for these recipients would likely
be considered to meet the criteria at 725.421.

b. Well characterized

The requirements for the "well characterized" criterion are set
forth at 725.421(b) which states that well characterized means that
the following have been determined for the introduced genetic material:
(1) The function of all of the products expressed from the structural
gene(s); (2) The function of sequences that participate in the regulation
of expression of the structural gene(s); and (3) The presence or
absence of associated nucleotide sequences where associated nucleotide
sequences are defined as those "needed to move genetic material,
including linkers, homopolymers, adaptors, transposons, insertion
sequences, and restriction enzyme sites." EPA discussed its rationale
supporting the well characterized criterion in the preamble to the
proposed rule (59 FR 45547 (September 1, 1994)).

Comments:

EPA received six comments (#8, 18, 28, 33, 34, 35) on its "well
characterized" criterion. Four commenters (#8, 18, 28, 33) noted
that it may be difficult to know the functions of all products expressed
by the structural genes. Two of these commenters (#8, 18) recommended
replacing the term "function" with "nature" in the requirement at
725.421(b)(1).

Three commenters (#28, 33, 35) requested further guidance from
EPA on how to address open reading frames (ORFs) present in the
introduced genetic material, since multiple reading frames had been
discussed in the preamble of the proposal. Two of these commenters
(#28, 33) stated that "[a]ll DNA sequences have the potential for
alternate ORFs. Some of these ORFs may be of sufficient size to
code for proteins, but many of these would be short ORFs with insufficient
coding capacity. A clearer definition of what constitutes an ORF
is required."

Two commenters (#28, 33) were concerned that the requirement at
725.421(b)(2) could be difficult to meet for some upstream activator
sequences, depending on how EPA interprets the term "function".
These commenters pointed out that the mode of action of upstream
activator sequences may not have been elucidated, although they
are necessary for enhanced expression and are well-described in
the literature. In this case, the commenters wanted to know what
information is needed to meet the criteria at 725.421(b).

One commenter (#34) questioned whether EPA would require complete
genomic sequencing of the final construct to meet the well characterized
definition.

EPA Response:

With regard to commenters' concerns about the level of characterization
necessary to qualify for the criteria at 725.421, EPA's intent in
developing the well characterized criterion was to ensure that the
functions introduced with the genetic material were sufficiently
understood to predict the likely behavior of the resulting microorganism.
To this end, manufacturers claiming eligibility for the exemption
must characterize the introduced genetic material and the functions
of the products of that introduced genetic material to the degree
necessary to predict the likely behavior of the resulting microorganism.
Because EPA defined a new microorganism as an intergeneric microorganism,
it is the predicted effect of the intergeneric sequences on the
phenotype of the recipient microorganism that must be evaluated.
These assessments must be performed in order to reduce the uncertainty
that the intergeneric microorganism will express unanticipated novel
traits beyond those intended by the introduction of the intergeneric
sequences.

As required under TSCA 5(d)(1)(a), these assessments should be
performed using information that is known to or reasonably ascertainable
by the person utilizing the exemption. (See Unit III.A. of this
document for a discussion of "reasonably ascertainable"). EPA will
not specify the techniques which should be used to show that no
unanticipated novel traits are likely to be expressed from the introduced
intergeneric genetic material but expects those utilizing the tiered
exemption to use their best scientific judgement and to maintain
good records describing how they arrived at their conclusions.

As noted earlier in this document (Unit III.A.), EPA will not
provide a single standard defining what is "reasonably ascertainable"
information. It should be noted, however, that the criteria at 725.420
through 725.422 establish conditions of eligibility for exemption
from the MCAN reporting requirements. Should the introduced genetic
material not meet the criteria laid out at 725.421, manufacturers
must submit a MCAN to EPA 90 days prior to first commercial manufacture.

With regard to the functions of products expressed by introduced
structural genes, manufacturers could rely, for example, on peer-reviewed
literature on products of structural genes and/or the results of
protein expression assays to characterize the function(s) of a gene
product. As manufacturers need only obtain information that is reasonably
ascertainable, they would not be expected to perform batteries of
tests to attempt to discover as yet unidentified functions of protein
products. The peer reviewed article of Baldwin et al (Ref. 15) and
its associated references (see in particular Figure 1), for example,
illustrate the level of understanding which is considered to be
"reasonably ascertainable" and appropriate to showing that the functions
of the lux genes of Vibrio fischeri are known.

EPA believes that most manufacturers wishing to utilize the exemption
would be able to meet the requirements at 725.421. There is an economic
incentive for manufacturers to fully characterize their microorganism
prior to scale up to large volume fermentations. Large-scale fermentations
utilize substrates which in aggregate can be costly and manufacturers
are likely to guard against the possibility that their microorganism
would display unexpected behaviors during fermentations. They are
also likely to ensure that the introduced genetic material expresses
the desired product at desired levels.

EPA does not intend the criterion at 725.421(b) to imply that
knowledge of the exact amino acid or protein sequence is required,
nor that sequencing of the introduced genetic material is required.
However, as noted by one commenter (#34), sequence information may
be available on specific regions because the information was acquired
in intermediate steps and is integral to development of the product.
Such information would be considered to be "reasonably ascertainable",
under TSCA 5(d)(1)(a).

The term "nature" has not been substituted for "function" at 725.421(b)
as suggested by two commenters (#8 and 18), because this change
does not lead to any greater clarity in the regulatory text and
the commenters offered no explanation as to how this change would
address their concerns.

With regard to commenters' questions about ORFs and their relationship
to the well characterized criterion, EPA noted in the preamble of
the proposed rule that the definition of well characterized would
include knowing whether multiple reading frames exist within the
introduced genetic material (59 FR 45547 (September 1, 1994)). Multiple
reading frames are a type of ORF. Manufacturers must ensure, by
evaluating ORFs and multiple reading frames, that unanticipated
novel traits are not expressed by the intergeneric microorganism.
ORFs must be assessed to determine whether a product other than
the anticipated, desired product is likely to be expressed from
the introduced genetic material and to predict whether such a product(s),
if expressed, would have an effect on the phenotype of the intergeneric
microorganism.

Examples of how manufacturers can determine whether ORFs are present
in the introduced genetic material include an analysis of nucleic
acid sequences for ORF attributes. Manufacturers could examine a
sequence for features such as start codons, a size sufficient to
encode a protein (small sequences below 200 base pairs are unlikely
to encode a protein) and ribosomal binding sites. To determine whether
an ORF could affect the behavior of the microorganism, manufacturers
could search for similarity to entries in computerized nucleic acid
or protein sequence databases.

With regard to commenters' questions about upstream activator
sequences (UASs), UASs are found in eukaryotes and perform a function
similar to a promoter in that they are thought to aid in the binding
of transcription factors to promoter regions. However, unlike a
promoter, upstream activator sequences can be located at varying
distances upstream from the start site for transcription and still
result in an increased activity of promoters in their vicinity.
UASs control the activity of other regions of genetic material that
act as recognition sites for the initiation of protein synthesis,
and do not encode proteins or functional RNA molecules. UASs, thus,
are regulatory regions which solely control the activity of other
regions (promoters) that act as recognition sites for the initiation
of protein synthesis.

In determining the status of UASs with regard to the exemption
at 725.421, manufacturers must first consider whether introduction
of the UAS would create an intergeneric microorganism. Because EPA
is retaining the interpretation that an intergeneric microorganism
is a new microorganism, a UAS(s) that is intrageneric would not
trigger 5 requirements. For a UAS isolated from an organism in a
different genus from the recipient microorganism, manufacturers
must determine whether their UAS meets the requirements in the definitions
at 725.3 for "non-coding regulatory region" and for "well-characterized".
Modifications to these definitions are discussed in Unit II.D. of
this document. Microorganisms developed through the introduction
of only UAS genetic material that is isolated from an organism in
a different genus and that meets the above noted definitions at
725.3 are excluded from the definition of "intergeneric microorganism"
and therefore are not subject to the reporting requirements of TSCA
5.

Manufacturers who wish to utilize the tiered exemption for microorganisms
that contain both a UAS(s) and other genetic material isolated from
an organism(s) in a different genus than the recipient, to meet
the exemption requirements must: (1) ensure that the UAS meets the
definitions of "non-coding regulatory region" and "well-characterized"
at 725.3; (2) ensure that the other introduced genetic material
meets the requirements at 725.421(b); and (3) ensure that the other
requirements of the Tier I or Tier II exemption are met.

c. Poorly mobilizable

The requirements for the poorly mobilizable criterion are set
forth at 725.421(c) which states that the probability that the introduced
material would be transferred to other microorganisms must be low,
with a frequency of transfer of less than 10-8 transfer events per
recipient. EPA discussed its rationale supporting the poorly mobilizable
criterion in the preamble to the proposed rule (59 FR 45547-48 (September
1, 1994)).

Comments:

EPA received six comments (#8, 18, 28, 33, 34, and 35) on its "poorly
mobilizable" criterion. Four of the commenters (#28, 33, 34, and
35) agreed that some limitations should be put on the mobility of
introduced genetic material, and two commenters (#8 and 18) agreed
that the 10-8 criterion was appropriate.

Although two commenters (#8 and 18) stated that the 10-8 criterion
is reasonable and prudent for sequences that pose significant risk,
one of these commenters (#18) argued that a higher mobility standard
should be acceptable in cases where the nature of the introduced
sequences indicates low to negligible risk. The other commenter
(#8) noted that the introduced "property is the significant issue,
not the transfer frequency."

Three commenters (#28, 33, and 35) noted that many factors affect
the frequency of transfer by conjugation, transformation, and transduction:
factors associated with the recipient microorganism such as restriction
enzyme systems, acceptable integration sites, compatible recombination
and replication functions, competency for transformation, phage
receptors for transduction, and compatibility for conjugation; factors
associated with the experimental conditions under which transfer
rates are to be measured such as presence of nucleases and other
environmental conditions. The commenters requested clarification
on the conditions under which the 10-8 criterion should be measured.

Four commenters (#28, 33, 34, and 35) stated that microorganisms
whose introduced genetic material is stably integrated into the
chromosome and do not have functional transposons should qualify
for the 10-8 criterion. They also requested clarification of the
following EPA statement in the preamble to the proposed rule: "In
instances where introduced genetic material is located on the chromosome,
steps can be taken to insure a low transfer frequency by transduction
and transformation by reducing opportunities for illegitimate recombination"
(59 FR 45548 (September 1, 1994)). Two of the commenters (#28 and
33) noted that sequences cannot be modified to decrease the likelihood
of transformation, and that most transformation rates are above
10-8. They expressed concern that no intergeneric Bacillus construct
would meet the poorly mobilizable criterion, since genetic material
from a B. subtilis chromosome will always be able to transform a
recipient of the same taxon at frequencies well above 10-8.

EPA response:

EPA agrees with those commenters who stated the 10-8 criterion
at 725.421(c) is reasonable and prudent. It is a standard established
by NIH in its Guidelines and an important feature of the OECD GILSP
(Ref. 2). The 10-8 standard can be achieved readily and has been
used by researchers for 20 years to ensure a measure of safety.
EPA believes the 10-8 criterion should be applied to the introduced
genetic material under 725.421, because EPA is not limiting the
source and function of the introduced genetic material (with the
exception of 725.421(d)). Therefore, EPA could not determine that
certain categories of organisms (that otherwise qualified for the
exemption) would present low risk without including the poorly mobilizable
standard in the criteria at 725.421. The poorly mobilizable criterion
imposes a level of biological containment on the introduced genetic
material and thus raises the Agency's confidence that a finding
of "no unreasonable risk of injury to health or the environment"
can be met for all organisms which qualify for the exemption under
Subpart G. The poorly mobilizable criterion reduces the probability
of gene transfer to microorganisms in the environment, should a
limited number of the intergeneric microorganisms escape and survive
in the environment.

EPA believes that manufacturers can readily determine whether the
introduced genetic material will meet the 10-8 criterion. For many
bacteria, a single mechanism of gene exchange, conjugation, will
need to be considered and the introduced genetic material constructed
to meet the 10-8 standard for that mechanism. Many of the bacteria
used for fermentation applications reviewed under TSCA have had
plasmid-borne intergeneric genetic material introduced into them,
making conjunction the most likely mechanism by which the microorganism
could transfer the intergeneric genetic material. The other two
mechanisms, transformation and transduction, are less likely to
widely disseminate introduced genetic material through the microbial
community. For transduction and transformation, most introduced
sequences will a priori meet the 10-8 criterion. However, for conjugation,
determining the transfer rate for introduced genetic material when
it is plasmid-borne may require closer consideration.

Transduction occurs primarily between members of the same strain
or species of microorganism. Although some broader host range phages
exist for some of the genera listed under 725.420 such as E. coli
(Ref. 16), generally bacteriophages have a narrow host range restricted
to one bacterial species or a small number of closely related bacteria
(Ref. 17). The high level of specificity associated with transduction
ensures a level of biological containment amongst taxa closely related
to the intergeneric microorganism. Although transduction frequencies
of up to 10-3 for E. coli in nonsterile soil have been noted, these
frequencies were obtained under idealized conditions in which concentrations
of phage, coliforms, and plasmids were optimized (Refs. 18, 19).
A transduction frequency of 10-8 is probably more realistic for
environmental conditions which are typically nonsterile and have
varying concentrations of phage and recipient bacteria.

For transformation, realistic conditions for gene transfer in
the environment would not likely include conditions that allow artificial
transformation at high rates in the laboratory, such as high concentrations
of calcium chloride and/or naturally competent recipients. Therefore,
transformation frequencies in the environment are likely to be below
10-8, although precautions must be taken to avoid the inclusion
in the introduced genetic material of insertion sequences and/or
transposons. Rates for natural transformation of Bacillus subtilis
using chromosomal DNA have been reported in the range of 10-5 to
10-7 over a 1 to 15 day period (Ref. 20). However, these rates were
obtained by optimizing conditions for transformation through the
use of at least five different techniques: (1) the DNA for transformation
was first adsorbed to the clay mineral montmorillonite prior to
its introduction into the test system (this clay protects DNA from
degradation); (2) the test system did not contain other bacterial
species; (3) the B. subtilis recipients were made competent using
special media prior to the test; (4) the recipients were introduced
into the test system at a time when the cells attained maximum competency;
and (5) optimal concentrations of recipients were present in the
test system. Moreover, although genetic material that survives in
the environment can move from one microorganism to another through
transformation, a fairly high level of specificity for uptake, integration,
and expression is associated with the recipient organism. Thus,
some level of biological containment exists to limit genetic material
being transferred to other microorganisms by transformation. To
further ensure biological containment for these sequences, they
must not contain known insertion sequences or transposons, because
insertion sequences and transposons may allow easier integration
of intergeneric genetic material into the recipient bacterium's
genome. Where introduced genetic material does contain insertion
sequences or transposons, submitters should consult EPA regarding
eligibility under 725.421.

For conjugation, one of three different levels of investigation
may be needed to estimate a transfer frequency. For some bacteria,
it will be a simple matter to ascertain whether the intergeneric
introduced genetic material meets the poorly mobilizable criterion.
For example, the transfer rate for the plasmid pBR322 in the absence
of helper plasmids is below 10-8. Therefore, in most cases using
pBR322 as the vector no testing would be necessary to determine
if introduced genetic material borne by pBR322 meets the criterion.
In other instances, tests done under optimum conditions (for example,
laboratory tests in the absence of indigenous microorganisms), may
show that the transfer rate is below 10-8. Finally, it may be necessary
in some cases to test under realistic environmental conditions.

Some commenters were concerned about whether introduced sequences
stably integrated into the chromosome with no functional transposons
meet the 10-8 criterion. Transfer frequencies for chromosomally
integrated sequences are likely to be low, and can be reduced further
by ensuring that the introduced genetic material does not contain
insertion sequences or transposons. Genetic material stably integrated
into the chromosome with no functional transposons is likely to
meet the 10-8 criterion.

If companies encounter difficulties in reaching a conclusion on
whether an intergeneric microorganism meets the criterion under
725.421(c), they are encouraged to consult with the EPA.

d. Free of certain sequences

The requirements for the "free of certain sequences" criterion
were set forth at proposed 725.421(d) which indicated that the introduced
genetic material must not contain any part of the nucleotide sequences
that encode certain listed toxins, which are polypeptides of relatively
high potency. EPA discussed its rationale supporting the "free of
certain sequences" criterion in the preamble to the proposed rule
(59 FR 45547 (September 1, 1994)).

Comments:

EPA received one comment (#25) on this criterion. The commenter
noted that the language in proposed 725.421(d), if taken literally,
would "preclude the use of DNA that codes for a pair of amino acids
(or even a single one) if that sequence also occurs in any of these
toxins". In order to clarify this point, the commenter suggested
that the language be altered to state that the introduced genetic
material must not contain a sequence "encoding any active moiety
of a toxin" listed in 725.421(d).

EPA response:

EPA did not intend for the restriction on toxin-encoding sequences
to be interpreted to mean that the presence of a nucleotide found
in a toxin gene sequence on the list at 725.421(d) would preclude
introduced genetic material containing that nucleotide from qualifying
for the tiered exemption. EPA believes the likelihood of any significant
risk resulting from incorporation of nonfunctional portions of a
toxin gene into a recipient microorganism listed at 725.420 is low.
The commenter's suggested focus on "active moieties" is consistent
with EPA's intention. However, an "active portion or moiety" of
a toxin is terminology already in use in the literature, and that
use is more narrowly defined in the literature than EPA's concerns.
Therefore, EPA has modified the language of 725.421(d) to include
the term "functional portion" of a toxin-encoding sequence. To assist
submitters in interpreting the term "functional portion" of the
toxin-encoding sequences described at 725.421(d), examples are provided
below.

For toxins which affect a cell's cytoplasmic functions, nucleic
acid sequences which form the "functional portion" of a toxin are
those which encode either functional A or B subcomponents of the
toxin. Each member of this group of toxins consists of an A, or
"active" portion which is responsible for the toxic action, and
a B or "binding" portion which permits binding of the toxin to the
target cell membrane. Some toxins have the A and B activities expressed
by the same polypeptide, and others have separate polypeptide subunits
for the two functions. Examples of these toxins, which act intracellularly,
include those such as diphtheria toxin (included in the list of
protein synthesis inhibitors at 725.421(d)(1)), botulinum toxin
(included in the list of neurotoxins at 725.421(d)(2)), and cholera
toxin (included in the list of toxins affecting membrane function
at 725.421(d)(4)).

For toxins which affect a cell's membrane, nucleic acid sequences
which shall not be included in the introduced genetic material are
those which encode the functional portion that allows target cell
membrane disruption. The toxins listed under 725.421(d)(5) function
by affecting target cell membrane integrity. Membrane-disrupting
toxins may act on the membrane directly; for example, lecithinase
lyses cells indiscriminately by acting on the lecithin in mammalian
membranes. A second group of cell membrane disrupting toxins act
by forming protein pores in the membrane, such as streptolysin O,
listed under 725.421(d)(3), which binds to cholesterol in red blood
cell membranes resulting in membrane channels. In contrast to those
toxins which act on cytoplasmic functions, these cell surface-acting
toxins are highly variable in structure and mode of action.

The same principle, however, applies to the membrane disrupting
toxins as to the toxins which affect cytoplasmic functions: the
introduced genetic material must not contain a nucleotide sequence
that encodes a functional portion of any of these toxin sequences.
In the case where a single polypeptide comprises the toxin such
as with lecithinase, the functional toxin must not be present in
the introduced genetic material. If a toxin subunit itself is comprised
of different polypeptides, the introduced genetic material shall
not encode a functional polypeptide from the toxin subunit. As an
example, pertussis toxin which affects membrane function has a B
subunit oligomer, which itself is comprised of four different polypeptides
(referred to as the S2 - S5 polypeptides). The introduced genetic
material must not encode functional portions of any one of these
polypeptides.

The introductory text of 725.421(d) has been modified to include
a definition of the term "functional portion of a toxin-encoding
sequence" and to emphasize that EPA is excluding specific toxin
sequences and not source organisms. This explanation contains examples
of sequences that directly or indirectly contribute to toxic effects
in human cells; further discussion of these effects may be found
in Ref. 21. The toxin list was developed based on the best literature
available at the time. Any newly discovered toxins of high potency
which are adequately described in the literature could be added
to this list through notice and comment rulemaking. In order to
further clarify the identity of the sequences of concern at 725.421(d),
the following text below has been substituted in the introductory
portion of paragraph (d).

"(1) The introduced genetic material must not contain a functional
portion of any of the toxin-encoding sequences described in this
paragraph (d). (i) For the purposes of this section, a functional
portion of a toxin-encoding sequence means any sequence which codes
for a polypeptide that has one of the following effects:

(A) It directly or indirectly contributes to toxic effects in humans.
Directly contributes to toxic effects in humans means those sequences
encoding polypeptides that have direct toxicity to target cells.
An example of a sequence which directly contributes to toxic effects
in humans is one which encodes the portion of diphtheria toxin,
listed in paragraph (d)(2) of this section, capable of interacting
with elongation factor 2, leading to inhibition of protein synthesis
in target respiratory, heart, kidney, and nerve tissues. Indirectly
contributes to toxic effects in humans means a sequence whose encoded
polypeptide is not directly toxic to target cells, yet still adversely
affects humans. An example of a sequence which indirectly contributes
to toxic effects is the sequence which encodes the portion of the
botulinum toxin, listed in paragraph (d)(3) of this section, capable
of blocking the release of acetylcholine from gangliosides. Botulinum
toxin affects neuromuscular junctions by its blockage of acetylcholine
release, leading to irreversible relaxation of muscles and respiratory
arrest.

(B) It binds a toxin or toxin precursor to target human cells.

(C) It facilitates intracellular transport of a toxin in target
human cells.

(ii) While these toxins are listed (with synonyms in parentheses)
in paragraphs (d)(2) through (d)(7) of this section according to
the source organism, it is use of the nucleotide sequences that
encode the toxins that is being restricted and not the use of the
source organisms. The source organisms are listed to provide specificity
in identification of sequences whose use is restricted. Although
similar or identical sequences may be isolated from organisms other
than those listed below in paragraphs (d)(2) through (d)(7) of this
section, these comparable toxin sequences, regardless of the organism
from which they are derived, must not be included in the introduced
genetic material."

4. Containment

The proposal included the following containment requirements for
the Tier I exemption at 725.422: (1) The structure is designed and
operated to contain the microorganism, (2) limit entry only to those
persons whose presence is critical to the reliability or safety
of the activity, (3) provide written, published, and implemented
procedures for the safety of personnel and control of hygiene, (4)
provide and document effectiveness of inactivation procedures to
reduce microbial concentrations by at least 6 logs in liquid and
solid wastes, (5) provide and document effectiveness of features
to reduce microbial concentration by at least 2 logs in aerosols
and exhaust gases released from the structure, (6) include and document
systems for controlling dissemination of the microorganisms through
other routes, (7) have in place emergency clean-up procedures.

EPA received 10 comments (#8, 18, 23, 25, 28, 33, 34, 35. 39) on
its containment criteria for the Tier I exemption. Two commenters
(#18, 24) indicated that the standards for minimizing releases of
microorganisms from facilities appeared to be reasonable. Six commenters
(#23, 28, 33, 34, 35, 39) felt that some of the standards were too
restrictive. Two commenters (#8, 25) felt that some of the standards
were too lenient. The comments focussed on the limited entry requirement
and the inactivation requirements.

a. Limited entry requirement

Comments:

Four commenters (#28, 33, 24, 25) indicated that the requirement
to limit entry to the facility to critical personnel is unduly restrictive,
given the low potential hazards posed by the microorganisms eligible
for the Tier I exemption. The commenters felt that under that requirement,
managers may be precluded from allowing administrative personnel,
customers, and school and other educational tours into the facility.
The commenters suggested substituting the following requirement:
"(b) There is controlled access to the structure."

EPA response:

EPA recognizes that language at proposed 725.422(b) may have been
stricter than was necessary. Neither the NIH Guidelines (Ref. 11)
nor the OECD GILSP criteria (Ref. 2) have specific limited entry
requirements for large scale uses of comparable microorganisms.
Additionally, EPA's review of PMNs received for intergeneric microorganisms
indicated that restricting entry to critical personnel was not common
industry practice (Ref. 22). EPA agrees with the commenters who
stated that given the low risk posed by the microorganisms eligible
for the exemption, managers should have the discretion to allow
administrative personnel, customers, and school and other educational
tours into the facility. However, EPA also expects that managers
will maintain appropriate containment, thereby controlling access
and avoiding inadvertent exposure. Modification of the language
of this requirement does not alter EPA's original determination
that microorganisms that are eligible for and used under the conditions
of the Tier I exemption will not present an unreasonable risk of
injury to human health and the environment. Therefore, EPA has revised
725.422(b) to read "Control access to the structure."

b. Inactivation requirements

Comments:

Three commenters (#28, 33, 35) indicated that with the limitations
placed on the recipient microorganism and the introduced genetic
material, quantitation of inactivation procedures was not necessary.
The commenters stated that it would be necessary to modify existing
equipment to sample off-gas as required and that an additional sample
port would increase the potential for contamination and worker exposure.
The commenters suggested that instead of numerical requirements,
language be substituted that more generally required reduction of
microorganisms in liquid and solid wastes and aerosols and exhaust
gases.

Two commenters (#8, 25) felt that the numerical requirements for
the inactivation procedures are too lenient. These commenters suggested
that gases be vented through a HEPA filter or incinerated. They
also recommended that the containment criteria be coordinated with
the containment levels set out in the NIH Guidelines.

EPA response:

After considering comments regarding its inactivation requirements
at proposed 725.422(d) and (e), EPA reviewed information submitted
on physical containment and control technologies in PMNs it has
received for intergeneric microorganisms between 1986 and 1995 (Ref.
22). On the basis of that review, EPA has made the following determinations.
EPA has decided to retain 725.422(d) which requires the use of inactivation
procedures that reduce microbial concentrations by at least 6 logs
in liquid and solid wastes. However, EPA has determined that it
is appropriate to revise 725.422(e) to read "Use features to minimize
viable microbial populations in aerosols and exhaust gases released
from the structure, and document use of such features." The reasons
for the decisions on these two requirements are discussed separately
in more detail below.

Control of liquid and solid wastes. As indicated in the preamble
to the proposed rule (59 FR 45548-49 (September 1, 1994)), EPA believed
that it was appropriate to prescribe standards for minimizing the
number of microorganisms emitted through the disposal of wastes,
because a wide range of behaviors could be displayed by microorganisms
eligible for the exemption and because EPA would not be reviewing
MCANs on microorganisms eligible for the Tier I exemption. EPA believes
that the requirement for a 6-log reduction in the number of microorganisms
is reasonable for inactivation of liquid and solid wastes and well
within current industry practices. The 6-log reduction criterion
represents a level of inactivation which can be validated. Reductions
greater than 6-logs become increasingly more technically difficult
to demonstrate. As discussed in the preamble to the proposed rule
(59 FR 45548-49 (September 1, 1994)), the number of viable microorganisms
remaining in the liquid and solid wastes after inactivation is expected
to be much lower than that required by the 6-log reduction. An examination
of PMNs for intergeneric microorganisms (Ref. 22) revealed that
this criterion can be readily achieved by manufacturers. The review
of these PMNs also indicated that in the several cases where monitoring
was conducted there were no detectable viable microorganisms in
liquid and solid wastes after inactivation (Ref. 22).

For proprietary reasons, manufacturers typically ensure complete
inactivation of their liquid and solid wastes. Even if some small
number of viable cells below the detection limit remained subsequent
to inactivation, their survival outside the fermentation facility
is likely to be limited since microorganisms used for extended periods
under cultivation typically become adapted to the optimal nutritional
and physical conditions in the fermentor. Their ability to survive
in the environment is compromised. In addition, further treatment
of the wastes such as in publicly owned treatment works (POTWs)
greatly lessen the opportunity for survival. Therefore, EPA believes
that the 6-log reduction in viable microbial numbers in the liquid
and solid wastes is a reasonable and demonstrable performance criterion
ensuring an appropriate level of containment for the low risk microorganisms
which would be eligible for the tiered exemption.

Validation of the 6-log reduction in microbial numbers for the
liquid and solid wastes need not be conducted for each fermentation
batch. Once an inactivation procedure has been documented as being
validated for meeting the 6-log reduction, that same inactivation
procedure can be followed to meet the required performance criteria.

EPA did not mean to imply that the required 6-log reduction referred
to a 6-log overkill capacity of an inactivation procedure. The 6-log
reduction in the number of microorganisms in the liquid and solid
wastes meant that the inactivation procedure used must reduce viable
microbial numbers by 99.9999%. This is equivalent to a 10-6 probability
of a microorganism surviving an inactivation treatment. As indicated
in the preamble, EPA expects the concentration of microorganisms
in fermentation vessels to range up to 1010 to 1011 colony forming
units (CFU)/ml. A simple calculation assuming no dilution of the
fermentor broth and a minimum inactivation efficiency of 99.9999
percent (or 6-log reduction) results in an estimate of the concentration
of viable organisms released from the facility of at most approximately
10-5 bacteria per milliliter. However, this number is likely to
be lower, since the required reduction is the minimum validated
inactivation and the actual kill achieved, shown by developing an
inactivation curve which is a standard industry practice, is likely
to be greater. Additionally, as discussed above, the survival in
the environment of any microorganisms remaining after inactivation
is likely to be compromised.

Control of aerosols and exhaust gases. As indicated in the preamble
to the proposed rule (59 FR 45548-49 (September 1, 1994)), EPA also
believed that it was appropriate to require manufacturers to minimize
the number of microorganisms emitted through the venting of gases
because a wide range of behaviors could be displayed by microorganisms
eligible for the exemption and because EPA would not be reviewing
MCANs for microorganisms eligible for the Tier I exemption. In the
proposal EPA indicated that a 2-log reduction in viable microorganisms
per cubic foot of air between the headspace and the actual vent
port was the appropriate standard. EPA chose this number based on
an estimate of the numbers of microorganisms likely to be in the
exhaust from an uncontrolled fermentor and common industry practice,
and because it represented a somewhat less restrictive number than
the reduction obtained with HEPA filter filtration (the reduction
level required for the NIH Guidelines BL1-LS level (Ref. 11)).

However, EPA received several comments pointing out the technical
problems associated with the proposed 2-log reduction performance
criterion. EPA agrees with the commenters that companies should
not have to modify/retrofit their existing equipment nor jeopardize
the sterility of their fermentations in order to validate that the
number of microorganisms being released in the exhaust has been
reduced by at least 2 logs relative to the microbial numbers in
the fermentor gases in the headspace. EPA did not intend that retrofitting
or any other overly burdensome engineering modifications would be
necessary for those who wished to utilize the Tier I exemption.
Rather, EPA had intended to develop requirements that would impose
performance standards for equipment already commonly used. In light
of comments received, EPA has sought to modify its requirement to
achieve its goal of having manufacturers demonstrate that the equipment
or features normally employed in fermentation systems are effective
in reducing numbers of viable microorganisms being vented in exhaust
gases.

As stated in the preamble and noted by two commenters (#28, 33),
industrial fermentations are not routinely run in an uncontrolled
fashion, and thus the number of microorganisms potentially released
into the gas phase and unrecovered is controlled. Additionally,
an examination of PMNs for intergeneric microorganisms (Ref. 22)
showed that all of the fermentations were operated with features
which minimize the number of microorganisms released in the off-gases.

For fermentations to operate optimally, vapor recovery systems
are used to maintain the correct growth conditions for the microorganisms,
e.g., correct molality in the fermentation broth must be maintained.
Vapor recovery systems, by their nature, help to minimize the number
of microorganisms exhausted from the facilities. EPA believes that
it should allow some flexibility in the type of features manufacturers
employ to minimize microbial releases as aerosols. A variety of
fermentor equipment or features are commonly used by the industry
such as demisters, wet scrubbers, cyclone separators, coalescing
filters, and HEPA filters. As stated in the preamble (59 FR 45549
(September 1, 1994)), even if microorganisms are exhausted from
the fermentor, their survival is probably limited due to the stress
conditions of aerosolization, including shear forces, desiccation,
and UV light exposure.

Given the comments received on the feasibility of this requirement
and the variety of methods used by PMN submitters to reduce microbial
numbers in aerosols, EPA believes that a specific numerical performance
standard is less appropriate for inactivation of aerosols than it
is for inactivation of liquid and solid wastes. EPA agrees with
commenters (#28, 33) who asserted that the majority of microorganisms
potentially released from the fermentation facility would be found
in the liquid and solid wastes. EPA has prescribed a specific viable
microorganism reduction standard for these materials. Therefore,
EPA believes that if the new microorganism meets all of the other
requirements of the Tier I exemption, it is sufficient to require
use of effective methods for minimizing release of microbial concentrations
in aerosols and exhaust gases without prescribing a specific numerical
reduction in numbers. If manufacturers are conducting their quality
assurance/quality control (QA/QC) monitoring to ensure proper performance
of their fermentation equipment, EPA believes that the facilities
would be meeting the requirement of 725.422(e). EPA has revised
725.422(e) to read "Use features known to be effective in minimizing
viable microbial populations in aerosols and exhaust gases released
from the structure, and document use of such features." Based on
the above points as well as the results of EPA's review of past
microorganism PMNs, EPA believes that this requirement will ensure
that the number of microorganisms released in fermentor off-gases
will be negligible and allow EPA to make the "no unreasonable risk"
finding of 5(h)(4). As discussed in the preamble to the proposed
rule (59 FR 45542 (September 1, 1994)), in order to promulgate a
TSCA 5(h)(4) exemption, EPA must determine that activities involving
new microorganisms eligible for the exemption will not present an
unreasonable risk of injury to human health and the environment.

EPA does not agree with commenters who stated that a 2-log reduction
for aerosols is too lenient. As discussed in the preamble (59 FR
45549 (September 1, 1994)), even if small numbers of microorganisms
are released in fermentor exhaust gases, aerosolization is a stressful
condition decreasing the survival of most microorganisms. Aerosolized
bacterial cells are weakened by shear forces, and are subject to
desiccation and exposure to UV light. Therefore, survival of aerosolized
microorganisms is expected to be limited. Since the organisms which
are eligible as recipient microorganisms for the Tier I exemption
are low risk, EPA does not believe it is necessary to impose more
stringent conditions than a requirement that manufacturers use validated
methods to minimize the numbers of microorganisms in fermentor off-gases.

Several commenters (#8, 18, 25, 39) suggested that EPA coordinate
its containment criteria with those specified in the NIH Guidelines.
EPA considered use of the NIH Guidelines when it was developing
the tiered exemption but found such an approach to be problematic.
In particular, the NIH Guidelines may change through a process independent
of EPA such that the Guidelines would no longer provide the appropriate
criteria to support a TSCA 5(h)(4) exemption. EPA has developed
an approach at 725.422 based, in large part, on standards set forth
in the NIH Guidelines and the OECD GILSP (Ref. 2) that allow EPA
to make the finding that is required under 5(h)(4). In considering
the specific containment requirements of the current NIH Guidelines
(Ref. 11), EPA could not find one level from Appendix K that EPA
believed would be appropriate for the Tier I exemption. The NIH
Good Large Scale Practice (GLSP) criteria that would be applicable
to some, but not all, of the microorganisms listed at 725.420, do
not require minimization of the numbers of microorganisms released
in off-gasses. However, EPA finds a requirement to minimize the
number of organisms in off-gases to be appropriate. On the other
hand, Biosafety Level 1-Large Scale (BL1-LS) criteria, which would
be too stringent for some of the microorganisms listed at 725.420,
require the use of HEPA filters or their equivalent, which generally
provide at least a 3-log reduction (Ref. 25). EPA finds the BL1-LS
requirement, which is more rigorous than EPA's original 2-log reduction
requirement, to be more restrictive than EPA believes is necessary
for the Tier I exemption.

In reconsidering its proposed requirement, EPA believes that the
costs of retrofitting existing equipment as well as the increase
in potential contamination and worker exposure that would accompany
sample collection necessary to validate the 2-log reduction requirement
are not justified for the low risk microorganisms eligible for the
Tier I exemption. EPA has attempted to make its approach compatible
with good practice in industry. Most of the requirements of 725.422
are analogous to NIH Guidelines requirements. In particular, companies
who are in full compliance with the NIH BL1-LS requirements would
also be in compliance with 725.422(e), although the use of HEPA
filters or their equivalent is a more stringent requirement than
725.422(e).

IV. REPORTING R&D ACTIVITIES FOR TSCA MICROORGANISMS

As discussed earlier in this document and in the proposed rule,
TSCA 5 generally requires notification of EPA at least 90 days prior
to the manufacture and importation of new chemical substances and
90 days prior to the manufacture, importation, and processing of
designated chemical substances for significant new uses. TSCA 5(i)
makes clear that only manufacturing, importing, and processing "for
commercial purposes" are subject to 5 notification. TSCA 5(h)(3)
exempts entirely from notification under 5 the manufacturing, importing,
and processing of chemical substances "only in small quantities
(as defined by the Administrator)" for R&D, subject only to
the manufacturer, importer, or processor notifying (as prescribed
by EPA) the persons involved in the R&D activity of any risks
to health associated with the substance.

As discussed in more detail below, for traditional chemical substances,
EPA has defined "small quantities" for R&D to be those quantities
"not greater than reasonably necessary" for the R&D purposes.
However, EPA is adopting a different definition of "small quantities"
for R&D for microorganisms, because living microorganisms may
reproduce and increase their own numbers or amount. The definition
adopted in this final rule limits the 5(h)(3) exemption from 5 MCAN
requirements to R&D activities that are adequately contained
as set forth in 725.234.

This narrower definition of "small quantities" means that R&D
activities conducted outside the prescribed containment (including
field tests) do not qualify for the 5(h)(3) exemption and are subject
to the MCAN requirement. However, EPA has created, under authority
of TSCA 5(h)(4), other exemptions that will reduce the reporting
burden for persons conducting certain R&D activities that do
not qualify for the complete exemption in 5(h)(3). These are discussed
below.

Researchers, including those in academic institutions, may be
subject to TSCA 5 jurisdiction because, by creating or reproducing
microorganisms in their R&D activities, they are "manufacturing"
or "processing" such microorganisms. Since many such R&D activities
involving microorganisms will not qualify for the 5(h)(3) exemption
from MCAN reporting, it is important for researchers, including
those in academic institutions, to determine whether their activities
fit within the definition of "commercial purposes" and, thus, are
subject to TSCA 5 and the MCAN requirements. Because of the nature
of microorganism R&D and the definition of "commercial purposes"
discussed below, it is likely that many researchers, including some
in academic institutions, will be subject to TSCA 5 jurisdiction
for the first time and will want to utilize the TERA and other exemption
provisions to reduce the reporting burdens involved in their R&D
activities.

Each of the exemptions for R&D activities applies to specific
types of activities. At the beginning of R&D, while the research
is taking place in a laboratory subject to appropriate containment,
the R&D activity may be fully exempt under the 5(h)(3) exemption
if the researcher complies with the conditions set out in the rule.
Once the researcher decides to conduct research outside the contained
setting, such as field tests, the researcher will need to utilize
a different exemption, such as the TERA.

A. TSCA JURISDICTION

The first step in determining potential TSCA 5 obligations for
R&D activities is to ascertain whether the use or potential
use of the microorganism is specifically excluded from TSCA 5. Uses
that are not specifically excluded are subject to TSCA. This consideration
is discussed in greater detail in this document in Unit II.

Any discovery and range-finding development work would be reportable.
Under the strictest interpretations, ETA would expect industry and
academia to submit a large number of unnecessary reportings and
maintain documentation for work which would not ultimately culminate
in a product to be introduced into commerce.

Another commenter (#24) stated that "some clarification of intent
is required where EPA asserts that all R&D is eligible for TERA
reporting. Much R&D activity falls outside the jurisdiction
of TSCA and therefore would not be subject to TERA." One commenter
(#11) requested clarification of EPA's statement in the proposal
that "EPA would consider that R&D activities involving new microorganisms
where researchers are unsure of the final use would be subject to
TSCA 5." This commenter went on to state that "based on this statement,
some biotechnology companies whose purpose is the development of
new drugs have expressed concern that the proposed rule may apply
to the early stages of their research." This commenter (#11) requested
that EPA confirm that entities performing research with new microorganisms
for the purposes of developing new drugs would not be subject to
TSCA. Another commenter (#31) requested that EPA confirm that the
proposed rule does not cover "Intergeneric microorganisms that are
cloned for use in research leading to possible new plant varieties
for food and other uses."

EPA response:

With regard to the clarification requested by one commenter (#24),
EPA's statement that all R&D activities are eligible for reporting
using the TERA process refers solely to R&D which is subject
to TSCA 5 requirements. EPA anticipates that much R&D activity
with microorganisms will not be subject to TSCA.

With regard to the commenter's (#11) requested clarification on
the status of R&D activities involving new microorganisms "where
researchers are unsure of the final use," EPA explained in the proposed
rule that, unless specifically excluded by TSCA, microorganisms
will generally be subject to TSCA. As explained in more detail in
Unit II, TSCA specifically excludes from its jurisdiction, various
chemical substances that are employed for particular products or
"uses". Microorganisms, or chemical substances, that are produced
for multiple or undifferentiated uses that are not specifically
excluded, however, are generally subject to TSCA. This is consistent
with EPA's treatment of traditional chemicals; in the original Inventory
Reporting Rules EPA stated:

[i]f a substance has multiple uses only some of which are regulated
under FIFRA or FFDCA, the manufacture, processing, distribution,
and use of the substance for the remaining uses would come within
the jurisdiction of TSCA. In cases where a substance is manufactured,
processed, or distributed for undifferentiated uses, the substance
will be presumed to be subject to TSCA for the purposes of these
regulations. 42 FR 64585 (December 23, 1977).

With regard to biotechnology companies engaged in development of
drugs, as explained in more detail in Unit II, microorganisms used
in the production of foods, drugs, cosmetics and medical devices
are similarly excluded from TSCA. Research conducted with the intention
of developing a product that would be solely employed as one of
those specifically excluded uses, would not be subject to TSCA.
However, persons who perform research with the intention of developing
a microorganism that may have multiple uses, some of which would
be subject to FIFRA or TSCA, or who are unsure of the ultimate use,
will need to consider whether they are subject to TSCA.

With regard to comments (#31) about the status under TSCA of intergeneric
microorganisms used in research leading to possible new plant varieties
for food and other similar research, EPA responds that if the plants
are being developed solely for a use specifically excluded by TSCA,
such as food, intergeneric microorganisms used in the production
of those plants would not be subject to TSCA. However, if intergeneric
microorganisms are used in the development of plants whose use is
uncertain, those intergeneric microorganisms could be subject to
TSCA.

However, EPA did not intend to imply that researchers using microorganisms
would automatically be subject to 5 requirements without consideration
of whether the research was conducted for a commercial purpose.
As discussed in Unit IV.B. below, if the research is at such an
early stage that any product development is highly speculative,
the research may not be "for commercial purposes", and thus may
not be subject to TSCA 5. The commenters apparently misunderstood
EPA's proposed preamble discussion, which was intended only to explain
the analytical steps to follow in determining whether researchers
would be required to file a TERA notice.

In addition, if the research activity is deemed to be commercial,
the research activity may be eligible for exemption under TSCA 5(h)(3)
(see Units IV.C. and E.), if the microorganisms are used exclusively
for R&D and meet the other requirements of the exemption.

B. RESEARCH FOR COMMERCIAL PURPOSES

The most substantial decision made in the final rule was selection
of the definition of commercial purposes for R&D activities.
TSCA 5(i) limits all 5 screening to activities for commercial purposes.
Research on traditional chemicals is not generally affected by the
commercial purposes limitation, because EPA's current regulatory
definition of small quantities for R&D using traditional chemicals
("any amounts reasonably necessary for research") at 720.3 effectively
exempts most research with these chemicals from 5 review. However,
because of the ability of microorganisms to reproduce, disseminate
and spread, EPA believed that it was necessary to review these products
at an earlier stage and therefore proposed an interpretation to
address testing with microorganisms. Consequently, EPA developed
a different small quantities definition for microorganisms and is
imposing reporting and record keeping requirements on certain R&D
activities. Researchers utilizing microorganisms, therefore, will
need to consider whether their R&D activities would be considered
commercial, and therefore subject to TSCA 5 requirements.

During development of regulations on biotechnology over the past
several years, EPA has received numerous public comments that differ
substantially on how the Agency should apply the commercial purposes
definition to research. Of particular concern has been the propriety
of an EPA oversight system based on the status of an activity as
commercial or noncommercial rather than on potential risk. Because
of the past difference in public opinion, EPA proposed three potential
approaches to defining what constitutes commercial activities: (1)
using indicia to determine commercial purposes; (2) presuming all
environmental testing is commercial; and (3) presuming that all
environmental research is commercial but offering an opportunity
for researchers to rebut the presumption. Rather than indicating
a preference, EPA discussed in the preamble the advantages and disadvantages
of each approach and asked for public comment on which approach
would be appropriate.

The first approach is based on the usual way of interpreting a
statutory term of art like "commercial purposes"; i.e., looking
for indicia of commercial intent. This is what EPA does in its TSCA
5 program for traditional chemicals. EPA recognized in the proposal
discussion of this approach the often complex relationships between
academia and industry in biotechnology, and the difficulties raised
by such relationships in determining what constitutes commercial
R&D activities at noncommercial institutions.

Under the second approach, all intentional testing outside of contained
structures would be commercial. This approach avoided the most significant
problem identified by comments over the years - that regulatory
oversight should be based on risk and that there is no difference
in the potential for risk between research conducted by industry
and research by noncommercial entities. EPA also included a third
approach which allowed researchers to rebut the presumption of the
second approach that their testing is commercial.

Comments:

EPA received 13 comments (#7, 8, 12, 18, 22, 23, 28, 29, 33, 34,
36, 37, 39) on its three alternative approaches to interpreting
"commercial purposes" for R&D activities. Five commenters (#7,
8, 18, 22, 36) urged EPA to develop "clear and direct indicia" (#7),
and strongly opposed the option of defining all environmental testing
as commercial. One commenter (#7) took issue with the idea of potentially
considering all research "commercial when conducted at an institution
receiving any commercial funding, regardless of whether those funds
are channeled to the project in question." Another commenter (#8)
while encouraging EPA to clearly define commercial R&D, also
indicated that "if criteria or clear indicia cannot be agreed upon,
it may be necessary to require that all intentional testing outside
of contained structures be considered commercial." One commenter
(#29) expressed concern about potential "confusion among investigators
at academic institutions who have research partnerships with biotechnology
firms." This commenter sought clarification of the reporting status
when a business provides research material but does not fund a specific
field test.

Six commenters (#12, 24, 28, 33, 37, 39) urged that EPA not distinguish
between commercial and non-commercial research for microorganisms.
One of these commenters (#12) specifically supported the approach
that defined all environmental research as commercial. Another commenter
(#37) indicated that "it is questionable to consider all field tests
to be commercial in intent in order to bring them under the regulatory
purview of TSCA" but at the same time agreed "that there is no substantial
difference in the risks posed by testing by academic/non-profit
organizations and commercial institutions." The other four commenters
were primarily concerned that "academic, government and non-profit
organizations should be viewed the same as commercial enterprises
with regard to the implementation of these policies" (#24). Two
commenters (#28, 33) suggested that EPA resolve the dilemma posed
by the contradictory directives imposed by TSCA (i.e., protect against
risk and exempt non-commercial research) at the R&D stage by
entering into an MOU with NIH in which NIH formally defers to EPA
for environmental testing that would normally be covered by TSCA.

EPA response:

Comments received on the proposed rule produced no prevailing opinion
on how EPA should define "commercial purposes" for R&D. In considering
this issue, EPA turned to its experience over the past several years
responding to researchers who inquired about the status of their
field tests under TSCA. EPA based its responses to those inquiries,
in part, on its approach to traditional chemicals under TSCA. Under
the TSCA 5 program for traditional chemicals, EPA determines whether
an activity is for a commercial purpose based on whether the purpose
of the activity is to have an immediate or eventual commercial advantage.
EPA found that determining the commercial status of research microorganisms
based on indicia similar to those used for traditional chemicals
functioned adequately. Therefore, EPA has decided that for this
final rule when determining whether their R&D activities with
microorganisms would be "for commercial purposes," researchers will
need to consider the indicia listed in 725.205(b). The indicia approach
applies to R&D in laboratories and other contained structures
as well as to intentional testing in the environment and is discussed
in more detail below.

Researchers who are attempting to determine whether their research
would be for "commercial purposes" should consult 725.205(b). Under
725.205(b)(1) researchers would first consider whether any of the
funding for the proposed research comes directly from a commercial
source. Any direct industry involvement in or direct funding of
an activity at a noncommercial institution is for commercial purposes.
This would include the use of company funds to develop the microorganisms
or the use of a company-provided microorganism in the research.
If any portion of the research is funded directly by a commercial
source, then the research is "for commercial purposes." Thus, if
any part of the research is funded by contract, joint venture, or
other financial arrangement, with the purpose of eventually producing
a commercial product, the research is subject to the requirements
of 5. For example, laboratory work or field tests conducted under
a research contract between a company and a university or a researcher
where patent rights or trade secrets are held by the company, would
be considered commercial R&D.

If researchers do not fall under 725.205(b)(1), they should next
consider potential indirect indicators of commercial intent as reflected
in 725.205(b)(2). They would need to consider, for example, whether
the research is directed towards developing a commercially viable
improvement of a product already on the market, or whether they
are seeking commercial funding or a patent.

If researchers do not fall within the scope of 725.205(b)(1) or
(b)(2), their research may be considered noncommercial. For example,
an outright gift from a company to a university or a researcher
without the company directing or otherwise controlling the research
for which the funds are to be used or the use to be made of the
results of the research conducted, would not be considered direct
funding under 725.205(b)(1). As such, the research conducted using
such a gift would be considered noncommercial R&D, assuming
the researcher also does not believe the microorganism has the potential
to be developed as a commercial product in the future, or otherwise
intends to obtain an immediate or eventual commercial advantage
as described under 725.205(b)(2). Therefore, if a researcher is
planning to conduct laboratory work or field tests or other environmental
testing using funds which were part of an outright gift from a company
to the university with no strings attached, that research would
be considered noncommercial R&D.

If none of the funding or support for the laboratory work or field
test or other environmental testing, including development of the
microorganism, comes from a commercial source, then the researcher
must consider whether he or she intends to pursue the development
of the new microorganism as a commercial product in the future,
should testing show potential commercial viability. The researcher
is responsible for judging when commercial intent exists for his
or her particular research project. EPA recognizes that in the initial
stage of research projects, researchers may not envision an eventual
commercial purpose for their microorganisms. However, if, during
the course of their investigations, researchers determine that their
microorganism has a potential commercial use which they intend to
pursue, they then become subject to the requirements of TSCA 5 and
this rule, and their further research activities must be in compliance
with this rule. EPA has provided examples of research that has an
immediate or eventual commercial advantage in the final rule regulatory
text at 725.205(b)(2)(i) through (iv). An example of "other evidence"
of a commercial application cited under 725.205(b)(2)(iv) would
be if the researcher has engaged in serious discussion with a company
concerning marketing or commercializing the microorganism if initial
research is successful. If researchers have difficulty deciding
whether their research is for commercial purposes, they are encouraged
to consult EPA.

The above approach represents a modified version of the indicia
of commercial purposes approach discussed in the preamble to the
proposed rule. EPA has adopted this modified version for the following
reasons. All research conducted directly by a commercial entity
is clearly for commercial purposes, as the court decided in The
Dow Chemical Company v. EPA, 605 F.2d 673 (3d Cir. 1979). Consequently,
if a business directly funds a research activity for potential product
development, the activity is for commercial purposes, even if the
research activity is conducted at an academic institution. EPA has
chosen to focus on the source of funding for the specific laboratory
work or field test or other environmental testing as the appropriate
indicator of commercial intent, because EPA recognizes that it can
be difficult to trace sources of funding at the institutional level
and agrees with the commenter who stated that "there is no logical
basis for the assertion that commercial support of one narrowly
defined project changes the fundamentalacademic nature of every
other activity conducted elsewhere in the institution."

The interpretation of commercial purposes EPA is choosing to implement
is consistent with interpretations in the current regulations for
traditional chemicals. That is, a commercial activity is one undertaken
with the purpose of obtaining an immediate or eventual commercial
advantage. This is the definition in 720.3(r), which defines "manufacture
or import for commercial purposes," and 721.3, which defines "process
for commercial purposes." Consequently, EPA has adopted the idea
in 725.3, which defines for microorganisms "manufacture, import,
or process for commercial purposes." Similarly, 720.30(i) provides
that "non-commercial research and development" consists of activities
conducted by academic, government, or independent not-for-profit
organizations "unless the activity is for eventual commercial purposes."
EPA has developed a comparable exclusion for non-commercial R&D
uses of microorganisms by including a definition of "commercial
purposes for research and development activities" at 725.205(b).
As noted above, this commercial indicia approach applies to R&D
in laboratories and other contained structures, as well as to intentional
testing in the environment.

EPA's experience over the past several years responding to researchers
inquiring about the status of their environmental research under
TSCA indicates the following points. All of the researchers identified
the sources of their funding for the particular experiments. Generally
they were able to readily indicate whether they believed there was
a future commercial application for the microorganism. In most cases
where a company was directly funding field tests to be conducted
at university sites, the company contacted EPA directly and took
responsibility for preparation of the PMN. In one case, researchers
were being funded by Federal agencies but were using company-owned
microorganisms subject to a TSCA 5(e) consent order. The company
asked EPA to modify the consent order to allow the company to give
the microorganisms to the researchers for use in their field tests.
Although the company made the original request, the researchers
submitted information about their field tests to EPA. Therefore,
researchers should contact EPA if they are planning field tests
involving intergeneric microorganisms supplied by a company. In
most cases, the researcher would be expected to submit the TERA.

In several cases where researchers contacted EPA regarding the
status of their field tests, EPA found that field tests using intergeneric
microorganisms were not subject to TSCA, because the field tests
were being funded by other Federal agencies and the researchers
did not foresee future commercial uses for their microorganisms.
Finding that these field tests did not constitute commercial R&D
under TSCA, EPA directed the researchers to the Federal agencies
that were the primary funding sources for the field tests and suggested
that researchers should, at a minimum, obtain reviews from these
agencies under relevant authorities, including the National Environmental
Policy Act (NEPA).

Although EPA has chosen in this final rule to follow an approach
for "commercial purposes" similar to its approach for traditional
chemicals, EPA recognizes that there are no differences in risk
depending on funding source. EPA takes seriously its responsibilities
to address risk and intends to pursue approaches laid out in the
Coordinated Framework for Regulation of Biotechnology (51 FR 23302,
June 26, 1986) to ensure an adequate network of oversight of R&D
activities. To this end, EPA will work closely with other agencies,
particularly NIH.

C. MICROORGANISMS ELIGIBLE FOR THE R&D SMALL QUANTITIES EXEMPTION

TSCA 5(h)(3) exempts from 5 screening chemical substances manufactured
or processed in small quantities solely for R&D and directs
EPA to define small quantities by rule. EPA's regulations for traditional
chemicals at 720.3(cc) define "small quantities solely for R&D"
as those quantities that are "not greater than reasonably necessary
for ...[ R&D] purposes." This definition of small quantities
for R&D has been appropriate for traditional chemical substances,
because these chemicals do not have the ability to increase their
own volume or amount. However, living microorganisms may reproduce
and increase beyond the number initially introduced, may establish
in the environment, and may spread beyond the test site. Once they
are released into the environment or are no longer contained, there
is no longer an assurance they will remain small quantities.

Therefore, EPA's definition at 725.3 of "small quantities" for
microorganisms is restricted to microorganisms that meet the requirements
of 725.234, which are designed to reduce the probability of establishment
by reducing the number and frequency of viable microorganisms emitted
from a facility. The small quantities exemption for microorganisms
is also referred to as the "contained structures" exemption, because
725.234(c) limits the exemption to R&D activities in contained
structures.

EPA received one comment (#33) regarding EPA's authority under
TSCA 5(h)(3) and five comments (#21, 31, 33, 38, 39) regarding the
status under TSCA of certain types of microorganisms used in research.
Generally these concerns related to use of research microorganisms
in commerce and use of genetic libraries.

1. EPA's authority under TSCA 5(h)(3)

Comments:

One commenter (#33) argued that "section 5(h)(3) of TSCA permits
manufacturers to manufacture or process small quantities of material
for the purposes of R&D" and argued that "there is substantial
burden on the Agency to justify any wholesale removal of the R&D
exemption provided by Congress."

EPA response:

EPA disagrees with the commenter (#33) who stated that EPA had
not justified the "wholesale removal of the R&D exemption provided
by Congress." TSCA 5(h)(3) does not provide a complete exemption
for all R&D, nor has EPA removed the statutory exemption wholesale.
Rather, TSCA 5(h)(3) exempts from 5 reporting, chemical substances
manufactured or processed in small quantities for R&D and specifically
directs EPA to define small quantities by rule. EPA has determined
that the definition of "small quantities" applied at 720.3 to traditional
chemical substances cannot be applied to all R&D activities
involving microorganisms for the reasons discussed in the preamble
to the proposed rule (59 FR 45539-40 (September 1, 1994)). While
discrete amounts of traditional chemicals used for R&D will
be diluted in the environment, living microorganisms intentionally
released to the environment have the potential to reproduce and
increase beyond the amount originally released. Therefore, EPA has
utilized its authority under TSCA 5(h)(3) to define "small quantities"
for living microorganisms differently than for traditional chemical
substances. By imposing regulatory conditions to reduce the probability
of establishment, EPA increases the probability that a living microorganism
will remain a small quantity used solely for the purpose of R&D.

2. Use of research microorganisms in commerce

Comments:

Four commenters (#21, 31, 33, 39) specifically asked whether the
traditional chemicals approach which applied the 5(h)(3) exemption
to research chemicals sold in commerce would apply to microorganisms
subject to TSCA. One commenter (#31) stated the following:

"EPA must therefore confirm that Inventory and PMN-exempt research
and development microorganisms include microorganisms which are
manufactured/imported commercially and sold for use as:

1. research products for experimentation on other substances;

2. intermediates for the manufacture of research chemicals;

3. analytical standards,

4. quality control agents;

5. reagents used for chemical identification including commercial
"test kits" which are used outside of a laboratory and in the field
to identify or quantify the presence of other "traditional chemicals"
or microorganisms in products, other substances, or in environmental
media. Such "test kits" meet the TSCA 5(h)(3) definition of exempted
research and development which EPA has consistently applied to the
sale of R&D substances.

6. microorganisms which are manufactured under prudent laboratory
practices inside a laboratory in small quantities at laboratory
scale for commercial sale for research purposes."

EPA response:

Although EPA redefined "small quantities" to address the specific
properties of microorganisms, EPA has not redefined or reinterpreted
the phrase "solely for research and development" and intended that
it would be applied to activities for microorganisms in the same
way that it has been applied to traditional chemicals. This is because
there is no significant difference in the type of research and development
activities described by this phrase for microorganisms as compared
to traditional chemicals. Consequently, any "small quantity of microorganisms,"
i.e., microorganisms which meet the requirements of 725.234, may
be used for any activity for which a traditional chemical eligible
for the exemptions at 720.36 and 720.78 could be used.

For purposes of clarification, EPA has modified requirements originally
included in proposed 725.235. Most of the proposed language was
adapted, with little revision, from the small quantities exemption
for traditional chemicals at 720.36. Upon further reflection, EPA
has determined that some of that language is not appropriate for
microorganisms. Therefore, EPA has deleted proposed 725.235(a)(2),
which provided an exemption from the small quantities notification
requirements for R&D in a laboratory, and proposed 725.235(e),
which related to impurities and articles. Additionally, the requirements
at proposed 725.235(c), (d), and (f) have been moved to 725.205(d),
(e), and (f), respectively, as these requirements apply to all R&D
activities under Subpart E. EPA has further revised 725.205(f) to
specifically exclude microbial pesticides by referring to the microbial
pesticide notification requirements that were promulgated in September
1994 (59 FR 45612).

Because EPA modified the definition of "small quantities" for microorganisms,
there will be some differences between the way EPA's regulations
treat R&D involving traditional chemicals and R&D involving
microorganisms. For this reason, and because EPA is uncertain what
the commenter (#31) meant by the phrase "Inventory and PMN-exempt
research and development microorganisms," EPA cannot confirm that
all six of the categories listed by that commenter will meet the
exemption requirements listed in 725.234 and 725.235.

In general, an activity will be considered "research and development"
if it consists of scientific experimentation or analysis for purposes
of developing a product (the discussion of commercial purposes under
Unit IV.B in this document is also relevant here). EPA intends this
phrase to be interpreted broadly, because EPA recognizes that contained
microorganism R&D may consist of several types of activities,
including the bench-level or laboratory synthesis stage, pilot plant
stage, and the performance testing stage. R&D activities include
tests of the genotypic, phenotypic, production and performance characteristics
of the new microorganism. For example, tests of genotypic and phenotypic
properties usually occur at the laboratory stage. Tests of production
characteristics could include tests of manufacturing equipment and
production processes. Tests of performance characteristics for R&D
purposes could include carefully monitored tests using limited quantities
of the microorganisms by the manufacturer or potentialcustomer.
These tests are distinguished from test marketing activities which
usually involve sale or distribution to potential customers to determine
competitive value of the substance. Any of these activities which
are not test marketing activities and occur in facilities meeting
the small quantities/contained structures exemption are eligible
for the exemption.

Sale of a microorganism for use in R&D does not necessarily
make the microorganism ineligible for the R&D small quantities
exemption. To be eligible for the R&D small quantities exemption,
microorganisms must be produced and used exclusively for R&D.
Microorganisms which are sold exclusively for the purpose of research
and development activities are eligible for the R&D small quantities
exemption if they meet the requirements of 725.234. Manufacturers,
importers, and processors may derive compensation from the sale
of microorganisms on which R&D will be conducted, or from the
sale of microorganisms such as laboratory reagents, standards for
analysis in laboratories, or intermediates to be used in the production
of R&D substances, without being subject to TSCA 5(a) notification
requirements. Distribution of a microorganism to any person who
will manufacture or process the microorganism for a commercial purpose
or directly to "consumers" removes it from the category of R&D.
Thus, so long as the microorganisms meet the requirements established
at 725.234, they would be eligible for the R&D small quantities
exemption when sold solely for use as research products for experimentation
on other substances, as intermediates for the manufacture of research
chemicals, as analytical standards, and as quality control agents.

Contrary to one commenter's (#31) statements, not all commercial
test kits are eligible for the R&D small quantities exemption.
Test kits which are considered to be medical devices are subject
to the FFDCA and therefore are not subject to TSCA, unless they
have other uses subject to TSCA. In the case of test kits which
are subject to TSCA jurisdiction, if intergeneric microorganisms
are used in test kits to identify or quantify the presence of other
substances, they may be eligible for the R&D small quantities
exemption. Eligibility for the exemption depends on whether use
of the test kit meets the conditions of 725.234. Test kits which
are distributed to consumers are not eligible for the R&D small
quantities exemption.

In addition to the requirements that an activity must involve "small
quantities" of microorganisms manufactured solely for use in R&D,
to qualify for this exemption, a manufacturer must comply with the
notification requirements established at 725.234(e) and explained
in 725.235(a) and (b). TSCA 5(h)(3) requires manufacturers and processors
to notify persons engaged in R&D of any risk to health that
may be associated with the R&D microorganism; the form and manner
of that notification, and the persons who must be notified are specified
in 725.234(e) and 725.235(b). Section 725.235(a) of the rule describes
the information which the manufacturer must review to determine
risks.

As to the commenter's (#31) request that EPA confirm the regulatory
status of "microorganisms which are manufactured under prudent laboratory
practices inside a laboratory in small quantities at laboratory
scale," such microorganisms would be eligible for the 5(h)(3) exemption
only if they meet the requirements of 725.234 and 725.235. Thus,
to clarify for the commenter (#31), microorganisms manufactured,
imported or processed in accordance with 725.234, and "for commercial
sale for research purposes," will be exempt from TERA reporting
if they comply with the conditions in 725.235.

3. Use of genetic libraries

Comments:

Two commenters (#38, 39) posed questions about the use of genetic
libraries in the development of products that could potentially
be subject to TSCA. Both commenters expressed concern about the
amount of TSCA reporting that might be required because of the large
number of microorganisms that make up a genetic library. One commenter
(#38) was specifically concerned about the costs of complying with
EPA's requirements. The other commenter (#39) recommended "that
EPA adopt a simplified mechanism for regulating construction and
commercial use of genetic libraries" and suggested a modified version
of the Tier I exemption for categories of libraries with common
properties.

EPA response:

EPA believes that most gene libraries subject to TSCA would likely
be eligible for the R&D small quantities exemption. A gene library
is a collection of a very large number of recombinants, each containing
a fragment of another organism's genome which together contain the
complete genome of the other organism. The DNA fragments which together
represent the complete genome may be stored in bacteria, phage,
or cosmids. An example of a library would be 4 x 105 lambda phages
containing the human genome. In many cases, collections of microorganisms
constituting a genetic library may be intergeneric. Gene libraries
serve in R&D as the source of gene(s) desired by researchers
or developers. The fragment containing a desired gene is selected
from a member of the library and further processed to create the
genetic material ultimately combined into the recipient to create
a microorganism with the desired trait(s). It is this latter microorganism
that is generally either the product or used to create a product.

Gene libraries and their constituent members can be considered
reagents, since fragments contained in them serve as the starting
point for a construct which will ultimately be inserted into a microbial
recipient to create the product microorganism. Therefore, constituents
of gene libraries and gene libraries themselves which would be subject
to TSCA jurisdiction but which are sold or used exclusively for
R&D are eligible for the R&D small quantities exemption
if they meet the requirements of 725.234 and 725.235.

D. R&D IN CONTAINED STRUCTURES SUBJECT TO TSCA AND ANOTHER
FEDERAL AUTHORITY

In the preamble to the proposed rule, EPA discussed situations
where R&D activities might be subject to both TSCA and another
Federal authority. EPA proposed different approaches to dealing
with overlapping jurisdiction, depending on whether the R&D
activities were conducted in a contained structure or involved intentional
environmental testing.

EPA proposed a complete exemption from EPA-specific reporting under
TSCA 5(h)(4) for research on new microorganisms in contained structures,
if the researcher is:

receiving research funds from another Federal agency which controls
the research in accordance with applicable portions of the NIH "Guidelines
for Research Involving Recombinant DNA Molecules." This control
may be exercised through direct regulatory authority or through
requiring compliance with the NIH Guidelines as a condition of receiving
funds. See proposed 725.232(b), 59 FR 45526, 45574 (September 1,
1994).

In the proposed rule, EPA also discussed exempting from TSCA 5
requirements the intentional environmental testing of new microorganisms,
when another Federal agency has clear regulatory authority and EPA
determines that the other Federal agency's review addresses criteria
equivalent to those which would be evaluated under TSCA 5. Specifically,
EPA indicated that it was working with USDA/APHIS to develop an
exemption from TSCA 5 requirements for R&D field tests reviewed
by APHIS under the Federal Plant Pest Act and the Plant Quarantine
Act.

Three commenters (#8, 18, 24) specifically indicated support for
the proposal to exempt from EPA requirements those researchers who
mandatorily comply with the NIH Guidelines. Four commenters (#8,
18, 22, 39) felt that researchers who voluntarily comply with the
NIH Guidelines should also be exempt from the TSCA 5(h)(3) requirements.
One of these commenters (#18) indicated that:

[i]t appears discriminatory that funding from a Federal agency
is a criterion for the R&D exemption, rather than compliance
with the guidelines. After all, some institutions, e.g., colleges
and non-profit institutions may not have outside funding at a particular
time, but should be considered equal to all other parties if they
demonstrate compliance to NIH guidelines. Another commenter (#8)
stated that any researchers required to comply with the Guidelines
should be exempt. "This should include universities receiving federal
funding, agencies and industry required to comply with the NIH Guidelines,
e.g., by lease requirements by institutional, municipal or state
ordinance."

EPA response:

All Federal agencies which support or conduct recombinant DNA (rDNA)
research abide by the NIH Guidelines. Only research institutions
that receive Federal funding for rDNA research are required through
contract provisions to ensure that all rDNA research conducted at
or sponsored by the institution, regardless of the source of funding,
complies with the NIH Guidelines. Research conducted by persons
who are following the NIH Guidelines for other reasons may not be
subject to oversight by another Federal agency. For example, research
conducted by a company which voluntarily chooses to follow the NIH
Guidelines would not be subject to Federal oversight unless Federal
funds were used in whole or in part in the conduct of the research.
EPA's requirements at 725.234 and 725.235 ensure that research subject
to TSCA is required by law to be performed under appropriate conditions.

EPA has retained at 725.232(b) its complete exemption from TSCA
5 obligations for research on new microorganisms in contained structures,
if the researcher is receiving funds from another Federal agency
which requires compliance with the NIH Guidelines. This includes
all research, whether directly funded by an agency or not, at a
university or institution that adheres to the NIH Guidelines on
an institution-wide basis as a condition of receiving Federal funds.
EPA developed this exemption to avoid duplicative oversight with
other Federal authorities. Researchers who are complying with the
NIH Guidelines voluntarily or through vehicles, such as contracts
or local regulations, will not be eligible for the exemption at
725.232, because their research is not being overseen by another
Federal agency. However, as discussed further below, EPA believes
that anyone who is complying with the NIH Guidelines should be able
to meet the requirements of 725.234 and 725.235 with little difficulty.

In order for EPA to make the findings required by TSCA 5(h)(3)
and 5(h)(4) to exempt researchers from reporting requirements, EPA
must ensure compliance with procedures designed to prevent uncontrolled
releases of microorganisms. These types of procedures are laid out
in the NIH Guidelines and the companion "Biosafety in Microbiological
and Biomedical Laboratories" (Ref. 23). EPA has provided an exemption
at 725.234 that is designed to provide complementary oversight of
those research activities that are not required by contract law,
as discussed above, to comply with the Guidelines. The provisions
of 725.234 effectively apply NIH Guidelines principles to those
institutions, primarily commercial facilities, that are not legally
required to abide by them. EPA also notes that the NIH Guidelines
specifically apply to rDNA research. Not all intergeneric microorganisms
will be constructed using rDNA techniques, and therefore not all
researchers working with intergeneric microorganisms would be required
to comply with the Guidelines. EPA regulations extend the benefits
of the NIH Guidelines by effectively applying their principles to
microorganisms other than those specifically mentioned in the Guidelines.
Researchers subject to TSCA can meet the requirements of the R&D
small quantities exemption by complying with the NIH Guidelines
and keeping records of such compliance for R&D activities subject
to TSCA. A detailed comparison of the NIH Guidelines and the requirements
of the R&D small quantities exemption can be found in EPA's
response in the next section of this Unit (see IV.E.1.).

E. REQUIREMENTS FOR SMALL QUANTITIES/CONTAINED R&D EXEMPTION

EPA indicated in the proposed rule that for those researchers
who are voluntarily complying with, but are not subject to, the
NIH Guidelines, the requirements of the R&D small quantities
exemption at 725.234 could be met by having the principal investigators
(PIs) serve as the TQIs required by 725.234(b) and keep records
indicating that they abide by and are following the NIH Guidelines
for the specific TSCA-subject R&D activities. EPA proposed to
rely on the experience and judgement of the TQI to select containment
and inactivation controls appropriate to the microorganism(s) being
utilized. In some cases, the TQI could find it appropriate to use
the NIH Guidelines, and in others, the TQI might not. EPA took this
position because EPA recognized that many different kinds of microorganisms
displaying a wide range of characteristics could potentially be
used in research and that the type of controls appropriate for one
microorganism might have limited relevance to other microorganisms.

EPA received 14 comments (#8, 15, 18, 22, 23, 24, 25, 26, 28, 30,
31, 33, 35, 39) requesting clarification of conditions of the R&D
small quantities/contained structure exemption. The comments can
be divided into two categories: (1) comments asking for clarification
of use of the NIH Guidelines, and (2) comments asking for clarification
of other aspects of the containment requirements.

1. Clarify use of NIH Guidelines

Comments:

Ten commenters (#8, 18, 22, 24, 25, 28, 30, 33, 35, 39) indicated
support for use of the NIH Guidelines and requested clarification
and/or made suggestions concerning the relationship of the NIH Guidelines
to the R&D small quantities exemption. One commenter (#18) also
felt that EPA should require all researchers to use the Guidelines.

Two commenters (#8, 18) stated that the authorized official mentioned
in 725.234(d)(2) should be an IBC chair. One of these commenters
(#18) also indicated that EPA should indicate which version of the
NIH Guidelines the proposed rule was referring to and that EPA should
allow for changes in the Guidelines. The other commenter (#8) noted
that it was not clear who would pay the cost of EPA inspections
and under what conditions the inspections would be conducted.

Five commenters (#25, 28, 33, 35, 39) stated that the recordkeeping
requirements of the R&D small quantities exemption were too
burdensome. Two commenters stated (#28, 33): "Unfortunately, the
regulatory language in this section is confusing and implies significant
recordkeeping unrelated to health or safety concerns. BIO believes
that adherence to the NIH Guidelines as part of a company's standard
operating procedure addresses the concerns set forth by EPA." These
commenters proposed that the following language be incorporated
in the final rule:

To demonstrate compliance with this part, a company needs to document
and certify that it is following the NIH Guidelines. For experiments
that are exempt from the NIH Guidelines, documentation of the exemption
is sufficient. For those not exempt from the Guidelines, the appropriate
Institutional Biosafety Review documentation is all that is required.

Another commenter (#39) urged EPA to allow oversight by principal
investigators and IBCs to be "an explicit alternative to the requirements
of 725.234."

EPA response:

EPA disagrees with the commenter (#18) who believes that EPA should
require all researchers to use the NIH Guidelines. While EPA considers
the NIH Guidelines to provide the primary standard for laboratory
research, EPA believes that it is appropriate to allow TQIs to have
the option of relying on their experience and judgement in selecting
appropriate containment as opposed to being forced to rely solely
on the NIH Guidelines. In addition, not all TSCA-subject microorganisms
will also be subject to the NIH Guidelines, since the Guidelines
focus on rDNA molecules and EPA focuses on intergeneric microorganisms
as "new". Therefore some researchers will need to rely for some
activities on EPA's criteria at 725.234, since their activities
will not be covered by the NIH Guidelines. In structuring its approach,
EPA believes it has provided an appropriate measure of flexibility
to researchers. Additionally, EPA believes that those researchers
who currently comply with the NIH Guidelines, but are not eligible
for the exemption under 725.232, nevertheless can comply with the
requirements of 725.234 and 725.235 with little additional burden
beyond that imposed by the NIH Guidelines.

With respect to the requirement at 725.234(d)(2) for certification
by an authorized official, EPA recognized in the proposal (59 FR
45540 (September 1, 1994)) that IBCs and similar committees are
charged with assessing the containment selected by researchers.
EPA encourages the active use of such committees and agrees that
an authorized official may be an IBC chair. Regarding the comments
about inspections, EPA inspections would be conducted under the
authority of TSCA 11 to assure compliance with the requirements
of 725.234.

EPA does not agree with the commenters who believe that record
keeping for the R&D small quantities exemption is burdensome.
As EPA noted in the proposal, EPA believes that persons following
the NIH Guidelines would keep adequate records as part of normal
procedures at an institution where IBCs are responsible for ensuring
the safety of research. Such records are likely to be adequate for
ensuring the safety of research. This issue is discussed in more
detail below in a comparison of the NIH Guidelines and the requirements
of 725.234 and 725.235.

Several commenters suggested that EPA adopt the NIH Guidelines
as a requirement for the R&D small quantities exemption. As
discussed previously, EPA believes that it is more appropriate to
show researchers how the use of the NIH Guidelines can fulfill the
requirements of the R&D small quantities exemption. In general,
EPA expects that companies currently complying with the NIH Guidelines
will also be able to satisfy the requirements of the R&D small
quantities exemption with little additional burden.

Comparison of NIH Guidelines and 725.234 and 725.235. In the first
section under IV. Roles and Responsibilities, the NIH Guidelines
state:

The safe conduct of experiments involving recombinant DNA depends
on the individual conducting such activities. The NIH Guidelines
cannot anticipate every possible situation. Motivation and good
judgment are the key essentials to protection of health and the
environment. The policy of the NIH Guidelines is similar to EPA's
approach to the R&D small quantities exemption for microorganisms
with its reliance on the experience and judgment of the technically
qualified individual (TQI). EPA believes that researchers who are
conducting research using intergeneric microorganisms in contained
structures and who are voluntarily complying with the NIH Guidelines
could easily meet the requirements of R&D small quantities exemption
set forth in 725.234 and 725.235. A review of the most recent complete
version of the NIH Guidelines (Ref. 11) indicates that the responsibilities
of the Principal Investigator (PI) listed in Section IV-B-4 are
similar to the requirements of the TQI under 725.234 and 725.235.
The following discussion is intended to assist researchers who wish
to determine how compliance with the NIH Guidelines meets the specific
requirements of 725.234 and 725.235.

1. Section 725.234(a) requires that the microorganism be used solely
for R&D activities. While there is not an equivalent PI responsibility
in the NIH Guidelines, this requirement is compatible with the PI
responsibilities set out in section IV-B-4 of the NIH Guidelines
discussed more specifically below. The Guidelines by implication
refer primarily to research, the title of the Guidelines includes
the term "research," and section IV-B-4 specifies the PI's responsibilities
for various aspects of research activities.

2. Section 725.234(b) requires the microorganism to be used under
the supervision of a TQI who must be qualified to comply with the
requirements of 725.234. Section IV-B-4 of the NIH Guidelines, which
sets out the responsibilities of the PI, indicates that the PI is
responsible for full compliance with the NIH Guidelines on behalf
of the institution.

3. Section 725.234(c) requires that there be no intentional testing
outside a contained structure. Section IV-B-4-e(4) of the NIH Guidelines
charges the PI with ensuring the integrity of the physical containment
and biological containment. The PI's selection of the appropriate
containment level from either Appendix G, which specifies physical
containment for standard laboratory experiments, or Appendix K,
which specifies physical containment for large scale research or
production uses of recombinant organisms, also ensures that there
will be no intentional releases from the contained structure.

4. Section 725.234(d)(1) requires the TQI to select and use appropriate
containment and/or inactivation controls. Under Section IV-B-4-c
of the NIH Guidelines, the PI is responsible for making an initial
determination of the required levels of physical and biological
containment, selecting appropriate microbiological practices and
laboratory techniques, and submitting research protocols to the
IBC for review and approval.

5. Section 725.234(d)(2) requires the TQI to have the selection
of containment and/or inactivation controls approved and certified
by an authorized official of the institution. In many cases, compliance
with the NIH Guidelines would satisfy this requirement. Under section
IV-B-4-c-(3) of the NIH Guidelines, the PI must submit the research
protocol to the IBC for review and approval. The IBC's approval
of the protocol would satisfy the requirement at 725.234(d)(2).
In cases where the experiments are exempt from submission to the
IBC under the NIH Guidelines, the PI should document such exemption
and have this documentation approved by an authorized official,
who does not necessarily need to be the IBC Chair. For example,
the official could be the PI's supervisor or the institution's Biological
Safety Officer (BSO). EPA believes that even where experiments are
exempt from submission to the IBC, the PI would be required under
the NIH Guidelines, at a minimum, adhere to standard microbiological
practices such as those described in "Biosafety in Microbiological
and Biomedical Laboratories" (Ref. 23).

6. Section 725.234(d)(3) requires the development of records describing
the selection and use of the containment and/or inactivation controls
as specified in 725.235(c). Section IV-B-4-a-(6) of the NIH Guidelines
indicates that the PI shall adhere to IBC-approved emergency plans
for handling accidental spill and personnel contamination. Section
IV-B-4-e-(3) states that the PI shall correct work errors and conditions
that may result in the release of recombinant DNA materials. While
Section IV-B-4-a does not specify record keeping responsibilities
for the PI, EPA believes that submissions to the IBC required by
Section IV-B-4-c, general documentation of routine standard operating
procedures, and specific notation in laboratory notebooks will generally
contain the information required under 725.234(d)(3).

7. Section 725.234(e) requires the researcher to notify all persons
in its employ, or to whom it directly distributes the microorganism,
who are engaged in experimentation, research, or analysis on the
microorganism, including the manufacture, processing, use, transport,
storage, and disposal of the microorganism associated with research
and development activities, of any risk to health identified under
725.235(a). The notification must be made in accordance with 725.235(b).
Section 725.235(a)(1) provides that for research conducted in accordance
with the NIH Guidelines, the manufacturer, importer, or processor
must meet the conditions laid out at IV-B-4-d of the NIH Guidelines
in making the determination of risk to health. Section 725.235(a)(2)
lists the information which must be considered in making the determination
of risk to health for research which does not qualify under subsection
235(a)(1).

Section 725.235(b)(1) requires the researcher to adequately notify
the persons identified in 725.234(e) of health risks determined
under 725.235(a). Section 725.235(b)(2) requires the researcher
to provide written notification of the following when the microorganism
is distributed to any persons not in the institution's employ: (1)
that the microorganism is to be used solely for R&D, and (2)
any health risks specified in 725.235(b)(1).

Under section IV-B-4-d of the NIH Guidelines, the PI is required
to provide laboratory staff with the protocols describing potential
biohazards and precautions to be taken: to instruct and train laboratory
staff in safety practices and procedures for handling accidents,
and to inform staff regarding precautionary medical practices advised
or requested. While there is no responsibility for the PI directly
equivalent to the requirements of 725.235(a), in order to be able
to carry out the responsibilities of section IV-B-4-d, the PI would
likely need to evaluate information similar to that described in
725.235(a).

Under section IV-B-4-a-(7), the PI shall comply with the Appendix
H shipping requirements for recombinant DNA molecules. EPA interprets
the requirement in section IV-B-4-a-(7) to notify laboratory staff
broadly. To be eligible for the R&D small quantities exemption,
institutions who have contractors conducting part of their research
with intergeneric microorganisms subject to TSCA must ensure that
the contractors also comply with the NIH Guidelines and the requirements
of 725.234 and 725.235.

Researchers should carefully read the requirements of 725.234(e)
and the related requirements in 725.235 to ensure that they have
correctly identified all persons who must be notified of potential
risks and notified them appropriately.

8. Section 725.235(c) specifies the manner is which persons conducting
research in accordance with the NIH Guidelines may satisfy record
keeping requirements under these regulations. Such persons need
only document that they have complied with the applicable provisions
of the NIH Guidelines. Section 725.235(c)(2) requires researchers
to keep the following records: a description of the selection and
use of containment and/or inactivation controls for each microorganism;
certification by the authorized official; copies of information
evaluated under 725.235(a); documentation of the nature and method
of notification under 725.235(b)(1); and information about persons
to whom the microorganism was distributed, the quantity distributed,
and copies of notifications required under 725.235(b)(2). As discussed
above for 725.234(d)(3), although section IV-B-4-a of the NIH Guidelines
does not specify record keeping responsibilities for the PI, EPA
believes that submissions to the IBC, general documentation of routine
standard operating procedures, and specific notation in laboratory
notebooks should contain much of the information required under
725.235(c)(2).

The records required by these sections contain the information
demonstrating the researcher's eligibility for the R&D small
quantities exemption and would be subject to EPA review during any
inspection. Therefore, researchers should review these requirements
carefully to ensure that the appropriate records will be maintained
during the course of the research.

Like the NIH Guidelines, EPA's regulations cannot anticipate every
research situation. Therefore, using the above discussion as guidance,
researchers subject to TSCA and complying with the NIH Guidelines
should evaluate their specific research situation to determine whether
their use of the Guidelines also fulfills the requirements of 725.234
and 725.235.

2. Clarify containment requirements

Comments:

Four commenters (#15, 23, 26, 31) asked that EPA clarify certain
aspects of the containment requirements for the R&D small quantities
exemption at 725.234. One commenter (#31) did not feel that EPA's
requirements for selection and use of containment and/or inactivation
controls inside a structure adequately recognized the "inherent
variability" in basic biotechnology research. This commenter recommended
that the containment and/or inactivation controls be selected "based
on an assessment of the range of possible outcomes from the experimentation."

Another commenter (#26) felt that EPA should clarify "the relationship
between containment/leaks and the risk of the organism." This commenter
suggested that contained structures "be defined as those which provide
primary containment as discussed in 725.234 and secondary containment
measures at areas defined from the abovementioned hazard/release
assessment." This commenter also wanted EPA to include an explicit
requirement for a hazard/release assessment and to provide guidance
on acceptable levels of probability of establishment.

One commenter (#23) expressed support for EPA's containment requirements
but felt that it was necessary for EPA to formally clarify that
bioreactors could be eligible for the R&D small quantities exemption.

EPA received two comments (#15, 23) relating to the role of the
technically qualified individual (TQI). One commenter (#23) felt
that it was appropriate to give the TQI a fair amount of leeway
in selecting containment because of the variability in microorganisms
that could be used. The other commenter (#15) believed that EPA
should play a stronger role in oversight of TQIs. This commenter
suggested that EPA modify its approach by planning to conduct routine
inspections and to routinely review TQI records.

EPA response:

EPA disagrees with the commenter (#31) who believes that EPA did
not adequately consider the "inherent variability" in basic biotechnology
research. In fact, it is because EPA recognizes that many different
kinds of microorganisms displaying a wide range of characteristics
could potentially be used in research that EPA is not prescribing
rigid containment requirements. EPA is relying on the experience
and judgement of the TQI to select appropriate containment and is
expecting that most researchers will rely on the NIH Guidelines,
which EPA considers to provide the primary standard for laboratory
research. This is also why EPA does not believe that it is necessary
to formally require a risk assessment or provide additional containment
guidance as suggested by one commenter (#26). EPA expects the TQI
to consider the potential risk of the microorganism(s) and of the
experiment and, applying the NIH Guidelines and other appropriate
guidance as well as expert judgement, select the appropriate controls
on the experiment. When research projects involve multiple organisms,
EPA expects the TQI to select conditions that would be appropriate
for handling all of the organisms.

EPA agrees with the commenter (#23) who stated that it was appropriate
to give the TQI leeway in selecting containment. As stated earlier,
EPA is aware that a variety of microorganisms will be used in research
that could be subject to TSCA oversight. EPA also recognizes that
the type of controls appropriate for one microorganism might have
limited relevance to other microorganisms. The TQI should possess
the necessary experience and judgement to select appropriate containment.
This assumption is consistent with the NIH Guidelines' reliance
on the oversight of the Principal Investigator. Additionally, the
TQI's decisions must be certified by an authorized official. Therefore,
EPA does not believe that EPA needs to strengthen its oversight
of TQIs.

With regard to the definition of "contained structure," EPA intentionally
chose a broad definition which could encompass a variety of structures,
such as pilot fermentation facilities, greenhouses, laboratories,
and bioreactors, if these structures can meet the other requirements
of the exemption. EPA disagrees with the commenter (#23) who believed
it is necessary for EPA to further define "contained structure."
EPA believes further definitions of "contained structure" are not
necessary, because the TQI's selection of containment and inactivation
controls appropriate to the microorganism being used should be the
primary means of ensuring that a structure is "contained."

In the proposed rule, EPA discussed a process for exempting small-scale
field tests of certain microorganisms from TERA reporting. The TERA
process is discussed in Unit G of this document. To qualify for
the exemption, certain criteria regarding the recipient microorganisms,
the source(s) and characteristics of the introduced genetic material,
and the conditions of use would need to be met. EPA proposed certain
strains of Bradyrhizobium japonicum (B. japonicum) and Rhizobium
meliloti (R. meliloti) as candidates for exemption from TERA reporting,
based on EPA reviews of PMNs voluntarily submitted for these microorganisms
under the 1986 Policy Statement and field test data generated in
these field trials.

1. Exemptions for Certain Nitrogen-Fixing Bacteria

Comments:

EPA received ten comments (#5, 8, 12, 15, 17, 18, 23, 27, 30, 36)
on its proposed TERA exemption for certain intergeneric strains
of the nitrogen fixing bacteria, R. meliloti and B. japonicum. Six
commenters (#8, 12, 18, 23, 30, 36) supported the proposed exemptions
with some modifications. Three commenters (#5, 15, 27) opposed the
exemptions. One commenter (#17) submitted journal articles to support
his position that EPA should proceed with caution when considering
the two exemptions.

Two commenters (#23, 36) supported the exemptions as proposed and
encouraged EPA to broaden the exemption opportunities. Three commenters
(#8, 18, 30), while expressing support for the exemption, also indicated
their support for a limited notification provision.

Two commenters (#8, 18) recommended that the strains of R. meliloti
and B. japonicum proposed for exemption be limited to those that
do not produce rhizobitoxin, that the exemption be expanded to allow
the use of markers other than antibiotic resistance markers, and
that a monitoring provision be included. Two commenters (#12, 15)
believed that it was necessary for EPA to strengthen its requirements
for the technically qualified individual (TQI) to limit exposure.

Two commenters (#5, 15) opposed the TERA exemptions based on EPA's
general lack of experience with genetically modified microorganisms.
Four commenters (#5, 12, 15, 27) specifically opposed EPA's proposal
to allow use of antibiotic resistance markers in the microorganisms
eligible for the TERA exemption.

Additionally, commenters raised objections to requirements for
the TERA itself and the TERA exemption that State and local authorities
be notified of planned testing. These comments are discussed in
more detail in Unit V.F. of this document.

EPA response:

EPA agrees with commenters who suggest that a limited notification
procedure, with fewer requirements than a TERA, is appropriate for
certain field tests under certain conditions. EPA has established
such a procedure in 725.238 for the exemption from TERA reporting
for certain activities conducted outside a contained structure.
If a field test qualifies for this exemption from full TERA reporting,
then prior to initiating their field tests submitters must send
a notice to EPA. The notice must include the location and the estimated
start date of the test as well as certification of compliance with
the specific conditions of the exemption.

In response to comments, EPA has modified some of the specific
conditions of the exemption for certain strains of R. meliloti and
B. japonicum. EPA has determined that it will follow a conservative
course and limit the source of genetic modifications to genes from
the closely related microorganisms Rhizobium and Bradyrhizobium
and, as discussed below, to incorporation of an antibiotic resistance
marker which EPA has previously reviewed. EPA disagrees with commenters
who do not believe that sufficient field test data have been generated
on these microorganisms. There is extensive information on R. meliloti
and B. japonicum generally documenting the lack of adverse effects
on human health and the environment. EPA has reviewed field test
data from several experiments using these organisms. As noted in
the proposal, EPA incorporated the public dockets pertaining to
the reviews of R. meliloti (18 strains: P87-568 through 570, P88-1115
through 1122, P89-280, P90-339, and P92-399 through 403) and B.
japonicum (six strains: P88-1275 through 1278, and P89-340 and 341),
along with the field test data, into the docket for this rulemaking.
These field tests have demonstrated that the strains modified by
the addition of genetic material from other rhizobia and by addition
of antibiotic resistance markers are similar to the unmodified parental
strains in colonization, survival, nodulation and effects on plant
growth. In addition, EPA has evaluated general and specific information
in the open scientific literature concerning these species, and
subcommittees of EPA's Biotechnology Science Advisory Committee
(BSAC) were convened to discuss general and specific issues associated
with the proposed R&D field tests with these species. For these
reasons, EPA believes the proposed exemptions to be appropriate
and disagrees with commenters who do not believe that sufficient
field data have been generated on these microorganisms.

Two commenters recommended limiting exemption to those Bradyrhizobium
strains that do not produce rhizobitoxine. Rhizobitoxine is a phytotoxine,
2-amino-4(2-amino-3-hydroxypropoxy)-trans-but-3-enoic acid, that
may be produced by bradyrhizobia in nodules. As mentioned by commenters,
this toxin can cause chlorosis (yellows) in susceptible cultivars.
It is not uncommon for bradyrhizobial isolates to produce this toxin.
EPA concurs that if such isolates were to become commercial products,
significant loss in yield of soybeans might occur. However, EPA
has not limited the exemption for Bradyrhizobium to non-rhizobitoxine
producing strains for several reasons. First, the TERA exemption
pertains to small scale field testing of ten (10) acres or less.
Should a rhizobial strain express rhizobitoxine, the effects would
be noticed early in product development, e.g. at the research stage.
It is unlikely that a strain causing chlorosis would be developed
into a commercial product. There would be a disincentive for a submitter
to knowingly utilize a toxin producing strain as a recipient, since
a submitter is unlikely to choose to develop a product that reduced,
rather than increased, yield. The use of rhizobitoxine producing
strains is thus likely to be self-limiting. Moreover, gene transfer
from the test organism to other rhizobia or other microorganisms
is not expected to present a problem because of the common occurrence
of the rhizobitoxine gene in naturally occurring isolates. These
naturally occurring isolates, because they are likely to be present
in relatively high numbers in soil, would be far more likely to
serve as a source for transfer of the rhizobitoxine gene to soil
microorganisms than would a test organism under controlled small
scale study. In any event, commercialization of a rhizobitoxine-producing
strain would be contingent on MCAN notification to and review by
EPA, and the issue would be evaluated at that time.

EPA welcomes the observations provided by one commenter (#17) that
intrinsic antibiotic resistance is commonplace in B. japonicum and
that Bradyrhizobium can persist after addition to soils. These documented
observations coincide with data obtained by EPA of field experimentation
using intergeneric Bradyrhizobium. Similarly, in developing this
exemption, EPA considered the information that the transfer rate
of transmissible antibiotic resistance elements between Bradyrhizobium
and the related Agrobacterium tumefaciens was very low (less than
10-8 per recipient), although transfer was not routinely reproducible.

While EPA concurs with the scientific observations made by the
commenter, EPA does not agree with the regulatory conclusions drawn
by this commenter. TSCA is a risk balancing statute, not one that
demands absolute absence of risk. The exempted use of the named
species in 725.239 permits only field testing on 10 acres or less
of land. As noted above, this exemption is based on individual experiments
reviewed and previously approved by EPA. The reviews of these experiments
considered information of the kind supplied by the commenter. The
conclusions of these reviews were that the experiments could go
forward, because the benefits outweighed the potential risks. The
information supplied by the commenter, especially the reports of
very low rates of gene transfer under optimal laboratory conditions,
provides no evidence that would serve to contradict EPA's conclusions
based on its experience with the prior field releases serving as
the basis of the TERA exemption.

With regard to the issues raised by commenters (#5, 12, 15, 27)
concerning the appropriateness of considering eligible for exemption
from TERA reporting certain intergeneric strains of B. japonicum
or R. meliloti constructed using antibiotic resistance genes from
any source, EPA has determined it will follow a more conservative
course than originally set forth in the proposed rule. Analysis
of natural isolates of rhizobia show that these microorganisms exhibit
high levels of intrinsic antibiotic resistances. Indeed, the high
frequency of a large variety of antibiotic resistance genes in rhizobia,
on occasion, render these genes of dubious value as markers. The
high level and variety of genes encoding antibiotic resistance in
rhizobial populations, coupled with the limitations on exposure
imposed by 725.239 suggest that use of antibiotic markers in B.
japonicum and R. meliloti under the conditions of 725.239 would
present overall a low probability of presenting an unreasonable
risk.

Nonetheless, EPA has determined that for the exemption described
at 725.239, it will follow the more conservative course of allowing
use in B. japonicum and R. meliloti of only the antibiotic resistance
marker EPA has previously reviewed for use in these microorganisms.
The regulatory text at 725.239(a)(2)(ii)(A)(1) and 725.239(b)(2)(ii)(A)(1)
has been modified to read as follows:

For structural genes encoding marker sequences, the gene is limited
to the aadH gene, which confers resistance to the antibiotics streptomycin
and spectinomycin.

Based on EPA's analysis of use of this marker in rhizobia, and
including consideration of the advice of the January 4, 1995 BSAC
Subcommittee, the use of streptomycin and/or spectinomycin resistance
markers in B. japonicum and R. meliloti currently meets this requirement
of the exemption.

EPA recognizes that the exemption at 725.239 is narrow and may
only apply to very few research projects. It may be the case in
the early years of the TERA program that TERA exemptions are narrowly
written to apply to specific microorganisms that have completed
TERA review. However, EPA hopes that in the longer term as EPA gains
greater experience reviewing intergeneric microorganisms for environmental
uses, broader exemptions can be written. To that end, EPA has placed
general requirements for the TERA exemption in 725.238 and will
use 725.239 to list certain microorganisms for the exemption and
the specific conditions of use as needed.

2. Federal agency R&D subject to TERA reporting

Comments:

EPA received seven comments (#7, 18, 23, 28, 29, 30, 33) on its
proposals for addressing field testing subject to more than one
agency's jurisdiction. Five commenters (#7, 18, 23, 29, 30) specifically
supported EPA's discussion of potentially deferring to other agencies'
reviews and determinations when appropriate. Three commenters (#18,
23, 30) indicated that EPA should specifically clarify EPA's relationship
with USDA/APHIS. One of the three commenters (#30) also stated that
the relationship to state regulation is unclear, particularly for
states which have their own biotechnology regulations.

Four commenters (#18, 23, 28, 33) suggested extension of EPA's
proposal to defer to other Federal agencies. One commenter (#18)
suggested that "in addition to specifically recognizing those agencies
[which already have jurisdiction over a product], previously developed
protocols applicable to microorganisms which could be covered by
TSCA should be mentioned. Another commenter (#23) urged "EPA to
return to the concept expressed in the 1991 draft proposed rule
that this exemption would be made available to noncontained R&D
as well as contained, by having EPA enter into memoranda of understanding
with other federal agencies to resolve overlapping jurisdiction."
Two other commenters (#28, 33) suggested that "EPA and NIH should
enter into a memorandum of understanding that OPPT [EPA] will have
oversight of all field experimentation that would normally be covered
by TSCA." These commenters also suggested that EPA place language
in 725.232 allowing EPA to review research that doesn't meet the
criteria of 725.232(a).

EPA response:

EPA agrees in principle with commenters who state that, when consistent
with the requirements of the statutes involved, products subject
to another statute as well as to TSCA need only be regulated by
one of those agencies. Presently, EPA has identified the Plant Pest
Act and Plant Quarantine Act administered by USDA/APHIS as presenting
some degree of overlapping jurisdiction with TSCA for microorganisms.
At this time EPA and USDA do not know of any products subject to
overlapping jurisdiction. Should such situations arise, EPA will
work with APHIS to develop a proposed exemption from TSCA 5 requirements
for R&D field tests subject to overlapping jurisdiction. In
the future, should other cases of duplicative oversight between
EPA and other Federal agencies arise, EPA will work with the other
agencies involved to develop an appropriate solution. Regarding
EPA's relationship to the states, EPA's coordination with the states
is discussed in Unit V.F. of this document.

G. TERA REPORTING PROCESS

Under 5(h)(4), EPA proposed to conditionally exempt from MCAN
notification certain R&D activities involving new microorganisms.
The exemption is conditional, since researchers must submit a TSCA
Experimental Release Application (TERA), an abbreviated notification.
Due to the availability of other exemptions for R&D activities
under these rules, EPA expects that the TERA will be used primarily
for environmental research. In the proposed rule, EPA indicated
that its goal was to review TERAs in 60 days, but that for good
cause, EPA could extend the initial TERA review period by an additional
60 days, for a total of 120 days.

Comments:

EPA received six comments (#8, 15, 18, 23, 24, 26) on the TERA
process. Three commenters (#15, 23, 26) supported the expedited
TERA process for review of field tests. Two commenters (#8, 18)
opposed the use of the TERA process. One commenter (#24) asked for
clarification of the process.

Two commenters (#8, 18), believing that the time and expense of
TERA preparation was not justified, suggested an alternative that
would have a researcher's Institutional Biosafety Committee (IBC)
forward a proposed experiment to EPA for a 30-day review. While
these commenters stated that the information requirements for test
site and target organisms were too extensive and open-ended, they
stated that because monitoring data were important for commercialization,
the requirement for monitoring data should include information on
type, frequency, and duration of monitoring.

One commenter (#24) requested that EPA clarify the TERA process,
especially the scientific reasons EPA would rely on for extending
the review period beyond 60 days. This commenter also felt that
EPA should publish the outcome of TERA reviews and include a discussion
of issues considered, because the commenter was concerned that there
could be delays since EPA had not specified information it would
need for its review.

Additionally, commenters raised objections to requirements for
the TERA itself and the TERA exemption. They also requested that
State and local authorities be notified of planned testing. These
comments are discussed in more detail in Unit V.F.

EPA response:

EPA believes that it is necessary to establish a review and approval
process specifically for R&D activities involving environmental
release. While many field tests of new microorganisms will be determined
to pose low risks, this assumption cannot be made for field tests
in general, and thus EPA finds some type of review is warranted.
However, EPA recognizes that full MCAN reporting also may not be
warranted. Therefore, EPA has chosen to develop a review and approval
process specifically tailored to address R&D.

EPA believes that the information requirements proposed for the
TERA are appropriate. EPA must have sufficient information to evaluate
the health and environmental effects of a planned field test. However,
because a variety of microorganisms are potentially subject to TSCA,
the requirements indicated in 725.255 are necessarily broad. Not
all of the requirements are equally applicable to all microorganisms.
Submitters are encouraged to consult with EPA prior to preparing
TERAs, so that appropriate information needs and concerns may be
identified.

EPA has made minor changes to the regulatory text at 725.270 to
clarify that EPA is approving or denying the TERA. Therefore, the
term "TERA agreement" which was used in the proposed rule has been
changed to "TERA approval." In addition to approving or denying
the TERA, EPA may provide, in the TERA approval, conditions under
which the R&D activity described in the TERA must be conducted
in order for EPA to make the TSCA 5(h)(4) finding that the R&D
activity will not present an unreasonable risk to health or the
environment.

As indicated in the proposal, in some circumstances EPA may extend
the TERA review period in order to complete its review. For example,
the review period might be extended if the submitter is asked to
supply additional information. Other instances presenting a need
for extensions include a Federal Advisory Committee Act (FACA) meeting
of an expert science advisory group or the need to coordinate review
with other Federal agencies.

H. OPTIONS FOR OVERSIGHT OF R&D ACTIVITIES

EPA proposed an approach for oversight of R&D activities which
included a variety of exemptions from the full 90-day reporting
process required for general commercial use activities. These exemptions
have been discussed in Units IV.C. through G. of this document.
EPA's goal was to provide a flexible process which tailored oversight
to the level of risk. EPA asked for comment on its R&D exemptions,
all of which have been discussed in this Unit, and indicated that
the public could suggest other options for consideration. EPA received
six general comments (#8, 18, 24, 25, 30, 33) on the proposed option
for oversight of R&D activities. EPA also received seven comments
(#8, 12, 15, 18, 23, 24, 33) on its specific alternative approach
for low risk field tests.

1. General comments

Comments:

Six comments (#8, 18, 24, 25, 30, 33) were received on the proposed
approach for oversight of R&D activities. Two commenters (#8,
30), while indicating that the R&D exemptions were comprehensible,
did not believe that level of oversight correlated to level of risk.
One of the two commenters (#30) suggested that EPA consider a notification
based on performance standards, believing that "this would also
eliminate the use of Federal funding as a determining factor in
deciding if a R&D exemption should be allowed." The other of
the two commenters (#8) stated that "it is erroneous to assume that
self-sustaining or multiplying populations of microorganisms will
do damage...[or] to presume that the microorganisms used in small-scale
field tests will establish themselves permanently in the environment."

One commenter (#24), in noting that EPA planned to supplement
the scientific expertise of its staff with additional experts when
necessary, encouraged EPA to consider consulting with experts from
private industry and offered to assist EPA in identifying those
experts.

Several commenters (#8, 18, 25, 33) were concerned about other
aspects of EPA's approach to oversight of R&D activities involving
environmental release. One of these commenters (#33) indicated that
there is sufficient information on small scale testing of microorganisms
to indicate limited movement from the test site and suggested, therefore,
that EPA use TSCA 8 to develop a postcard notification process,
rather than a 5 review process. As proposed by this commenter, under
TSCA 8, EPA would require that 30 days prior to initiating a field
test, researchers submit the following information:

A. The common and scientific name of the microorganism and a description
of its known genetic characteristics;

B. The purpose, location, and date of the proposed field test;

C. The total amount of the microorganism or microorganism- containing
product to be used during the field test;

D. An assessment, based on literature information and/or lab, greenhouse
or growth chamber results, of the microorganism's ability to survive
under conditions of the field test, along with any physical, chemical,
or biological measures which will be used or available if there
is a need to control the microorganism;

E. Information in possession of the applicant or publicly available
regarding the potential environmental or health effects of such
a field test;

F. The name of the principal investigator, the number of individuals
that may be exposed during the field test and the duration of that
exposure.

The commenter also suggested that EPA could utilize its authority
under TSCA 7 and 11, in conjunction with its 8 authorities to provide,
if necessary, a higher level of EPA oversight than 8 alone.

Three commenters (#8, 18, 25) indicated that "since the TERA burden
is structured to be minimal, the value of exemptions will rely primarily
on the response time by EPA to exemption requests." One commenter
(#18) also indicated that EPA consider developing exempt categories
for small scale field tests involving "microorganisms with deletions
or markers conveying no phenotypic trait of consequence to humans
or the environment."

EPA response:

EPA disagrees with comments that the level of oversight imposed
in its R&D exemptions is not correlated to level of risk. EPA
discusses the basis for oversight of "new microorganisms" in Unit
II.D. of this document. EPA has chosen to implement its R&D
oversight in a manner which distinguishes between R&D activities
in contained structures and R&D activities involving intentional
release to the environment because of the greater overall potential
in the latter case for survival, dissemination, and exposure to
the microorganisms.

Within this broad structure, EPA has developed several exemptions
which recognize the differing risk potentials presented by different
settings and organisms. Two low burden exemptions have been developed
for contained structure R&D which recognize the limited exposure
and risk potential of R&D which meets the contained structure
conditions. The small quantities R&D exemption for microorganisms
used in contained structures should not be overly burdensome, because
EPA believes, as discussed previously in this Unit, that in most
cases, researchers who are voluntarily complying with the NIH Guidelines
will possess the information needed to meet the requirements at
725.234 and 725.235. In any case, EPA expects that laboratory notebooks
and other records normally kept in the course of research would
contain most of the information required for compliance with the
exemption.

The exemption for contained R&D which is also subject to another
Federal authority is acomplete exemption from TSCA 5 obligations.
EPA developed this exemption because persons conducting research
subject to another Federal agency's requirements would already to
subject to oversight. Researchers subject to TSCA who do not meet
this criterion may still perform their R&D in accordance with
the NIH Guidelines but must also meet the requirements imposed under
these regulations. These contained structure R&D exemptions,
which are discussed above in Unit IV.C. through E, are expected
to be broadly applicable and are expected to minimize the occurrence
of TERA reporting for contained structure R&D.

Another low burden exemption has been developed for R&D field
trials which meet certain conditions and use specified microorganisms.
The basis for this exemption is found in EPA's prior experience
in reviewing microorganisms meeting these requirements and sets
the stage for EPA to create additional exemptions at 725.239 as
EPA's experience grows (see Unit IV.F.). In addition, EPA is developing
and plans to propose an exemption for low risk field trials. This
exemption, once fully developed, is expected to be similar to the
description in Unit II.D.5.2. of the proposed rule preamble (see
Unit IV.H.2. of this document). Thus, when the full set of exemptions
are developed, researchers will have a wide array of alternatives
to the submission of a TERA, which is itself an exemption from full
MCAN reporting (see Unit IV.G. of this document). The TERA consists
of an abbreviated notice and a shortened review period relative
to the MCAN.

EPA does not agree with the commenter (#33) who stated that there
is sufficient information to indicate limited movement of microorganisms
from small scale field tests. While limited movement may be associated
with certain microorganisms under certain conditions, this assumption
cannot be applied generally to the variety of microorganisms in
a variety of uses which could potentially be subject to TSCA.

EPA also disagrees with the commenter (#33) who stated that a TSCA
8 reporting rule would be appropriate for oversight of new microorganisms.
Section 5 explicitly requires all manufacturers and processors to
submit a notice to EPA 90 days before manufacturing new microorganisms,
to permit EPA to review them to determine whether such new substances
may present an unreasonable risk of injury to human health or the
environment. EPA can only forego that review if it can determine
in advance of such review that the substance will not present an
unreasonable risk of injury to health or the environment. Given
that 8(a) exempts small manufacturers and processors from coverage,
EPA could not meet its 5 obligations by issuing a regulation under
8. EPA does not believe that sufficient information currently exists
to determine that all small scale field testing for all intergeneric
microorganisms currently or subsequently produced by small manufacturers
and processors will not present an unreasonable risk of injury to
health or the environment. EPA also lacks sufficient information
to justify decreasing EPA's review period from 90 days to 30 days
for all small scale field testing for all intergeneric microorganisms
currently or subsequently produced, which are potentially subject
to TSCA.

Nor would reliance on EPA's authority under 7 and 11 compensate
for the defect discussed above. Section 7 was designed as a response
mechanism for risks that develop from the use of chemicals already
in commerce. The purpose of 5 review is to determine the health
and environmental effects of a substance before commercial production
begins, and to prevent such risks from developing by establishing
restrictions which mitigate the risks without imposing undue economic
burden. See, e.g., H.R. Conf. Rep. No. 1679, 94th Cong., 2d Sess.
65 (1976). The difference between the two mechanisms is particularly
important in this context, since EPA's ability to control or address
any resulting risks, should a "risky" intergeneric microorganism
become established in the environment, would be limited at best.

In the 1986 Policy Statement, EPA discussed using TSCA 8(a) to
obtain information on a greater variety of microorganisms to assess
whether additional categories of microorganisms not then subject
to TSCA 5 reporting might need to be regulated. Since that time,
EPA has determined that it is focussing its TSCA 5 authority on
the appropriate categories of microorganisms and does not believe
that a TSCA 8 reporting rule for microorganisms would be useful.
The type of information the commenter suggests that EPA should require
in a 8 rule is the type of information which EPA asks that researchers
submit in the form of the TERA. EPA believes that the TERA reporting
process has been appropriately established under TSCA 5(h)(4). Further,
EPA believes that TSCA 5(h)(4) is the appropriate vehicle under
which to refine its reporting program for microorganisms.

2. Specific alternative for low risk field tests

In the proposal, EPA briefly discussed an alternative exemption
for certain R&D releases. This alternative would contain requirements
for documentation and record keeping by a TQI and certification
by an authorized official. Following the TQI's determination that
the field test met the eligibility requirements, a notice summarizing
the new microorganism and the proposed field test would be submitted
to EPA for a 45 day review. In lieu of a TQI, the analysis could
be performed by a third party review group such as an Institutional
Biosafety Committee (IBC) as described in the NIH Guidelines.

One commenter (#23) indicated that "some form of self-certification,
subject to EPA notification, would be appropriate for a variety
of potential field tests of intergeneric microorganisms." Two other
commenters (#8, 18), however, while supporting the alternative,
indicated that "it is not clear how this would work in practice,
since the TQI apparently must still notify EPA." Another commenter
(#24) suggested that EPA provide a list, updated quarterly, of microorganisms
that specifically meet the criteria. This commenter also stated
that "EPA should also publish a listing of all microorganisms and
genetic material that would now fall into this category prior to
implementation of these rules." One commenter (#33), while expressing
support for the alternative, strongly objected to the provisions
requiring officials to accept full liability for harmful consequences
of the field test.

One of the commenters (#12) opposing the alternative, indicated
that it was premature because there is a lack of data on use of
genetically modified microorganisms in the environment and "no consensus
on what releases constitute low risk." The other commenter (#15)
opposing the alternative was concerned that it represented an over-reliance
on self-regulation by researchers and that the complexity of the
determination involved would result in inconsistent decisions about
risk.

EPA response:

EPA is not finalizing this option at this time. However, EPA intends
to repropose an exemption along these lines at a later date to allow
the public an opportunity to comment on the information on which
EPA would rely to support the exemption.

V. OTHER ISSUES

A. MICROORGANISM - DEFINITION

EPA proposed to define "microorganisms" as those organisms classified
under the 5-kingdom system of Whittaker (cited in Atlas and Bartha
(1987)(Ref. 24)) in the kingdoms Monera (or Procaryotae), Protista,
and Fungi, the Chlorophyta and the Rhodophyta of the Plantae, and
viruses and virus-like particles. Therefore, this definition includes,
but is not limited to, bacteria, protozoa, fungi, mycoplasmas, mycoplasma-like
organisms, spiroplasmas, microphytoplanktons, green and red algae,
viruses, and virus-like particles (e.g., viroids, satellites, and
virusoids). Should new categories of organisms within the Monera,
Protista, Fungi and the Chlorophyta and Rhodophyta of the Plantae
be identified, these would also be considered microorganisms under
this definition.

EPA proposed to treat viruses of other microorganisms (also termed
phages) as MGEs. EPA's MGE policy is discussed above in Unit II.D.
In the proposed rule preamble, EPA indicated that it was not able
to identify uses of viruses of macroorganisms that might be subject
to TSCA. EPA asked if it was appropriate to apply the intergeneric
interpretation to viruses of macroorganisms if TSCA uses for such
viruses were identified.

Comments:

EPA received four comments (#8, 12, 18, 24) related to its definition
of "microorganism." Three of the commenters (#8, 18, 24) indicated
that they believed the definition to be reasonable. Two of the three
(#8, 18) indicated that the more practical definition was "if the
individual organism cannot be seen with the naked eye, it is a microorganism."
These two commenters also stated that including members of the two
plant groups was reasonable.

The four commenters (#8, 12, 18, 24) discussed EPA's proposed
coverage of viruses. One of the commenters (#24) felt that the inclusion
of viruses in the definition was reasonable. Two of the commenters
(#8, 18) felt that the approach treating phages as MGEs was reasonable,
although one commenter (#18) indicated that "The question should
be asked, however, whether all phage should be included." A fourth
commenter (#12) stated that because of the special risks posed by
viruses, EPA should not apply the intergeneric approach to viruses
of macroorganisms. This commenter also urged EPA to promulgate a
Significant New Use Rule (SNUR) for TSCA uses of all deliberately
modified viruses of macroorganisms.

EPA response:

EPA will retain the definition of "microorganism" as discussed
in the proposed rule. Those who commented on the definition thought
it was reasonable and included the appropriate organisms. EPA will
treat phages as MGEs. A phage modified to contain genetic material
from an organism classified in a different genus from the genus
from which the modified (recipient) phage was isolated would be
considered intergeneric. Under this interpretation a phage which
has been modified to contain genetic material from a virus of a
macroorganism would also be considered a "new" microorganism. No
commenters identified current or imminent TSCA uses of viruses of
macroorganisms. Therefore, EPA believes the best use of limited
resources would be to develop an approach under TSCA for viruses
of macroorganisms in the future if TSCA uses are identified. Anyone
planning to use a virus of a macroorganism for a TSCA use should
contact EPA regarding the status of the virus under TSCA 5.

B. TSCA INVENTORY

EPA described in the proposed rule preamble how it planned to explicitly
list microorganisms on the TSCA Inventory and the rationale for
the proposed listing (59 FR 4555152, September 1, 1994). EPA proposed
to identify microorganisms on the Inventory using a taxonomic designation
and a consistent set of supplemental information on phenotypic and
genotypic traits necessary to identify the microorganism as precisely
as possible. Additionally, EPA indicated that it was considering
requiring that microorganisms listed on the Inventory be deposited
in a recognized culture collection.

In the proposed rule, EPA advised manufacturers and importers
of any of the 192 microorganisms reported in 1978 to the initial
TSCA Inventory that EPA planned to remove from the Inventory the
explicit listing of these microorganisms. EPA believed that most
of these microorganisms are not intergeneric; therefore they would
be implicitly included on the Inventory and do not need to be explicitly
listed. EPA asked manufacturers and importers of these microorganisms
to inform EPA if any of the microorganisms were intergeneric and
should not be removed from the Inventory.

Eight commenters (#8, 18, 23, 24, 28, 33, 34, 35) expressed concern
about EPA's proposal to require that microorganisms listed on the
Inventory be deposited in a recognized culture collection. One commenter
was concerned about the effect of EPA's requirement on patent protection.
Two commenters (#8, 18) stated that such a requirement would be
unnecessary and onerous at the R&D stage. Five commenters (#23,
28, 33, 34, 35) strongly opposed any requirement for deposit of
a microorganism in a culture collection.

EPA response:

EPA has considered the concerns raised by commenters who oppose
the culture collection requirement and has decided that deposit
of new microorganisms in recognized culture collections is not necessary
at this time for TSCA 5 purposes. Some commenters (#23, 24) noted
that a requirement for deposit in a culture collection would duplicate
requirements under U.S. and international patent law. Several commenters
(#8, 18, 24) also cited the costs associated with maintaining microbial
cultures in culture collections. Concerns were also expressed by
several commenters (#23, 24, 28, 33) regarding the need to establish
procedures to maintain the confidentiality of microorganisms submitted
to culture collections during the R&D stage and prior to issuance
of a patent. It was not EPA's intention to require that microorganisms
being used for R&D purposes be deposited in a culture collection.
EPA stated in the proposed rule that it was "considering requiring
that microorganisms listed on the Inventory be deposited in a recognized
culture collection", 59 FR 45526, 45551 (September 1, 1994)(emphasis
added); microorganisms being used for R&D are not eligible for
inclusion on the Inventory. Nonetheless, EPA believes that several
practical considerations were raised in the public comments. In
addition, should EPA need to obtain a sample of a new microorganism,
other avenues for doing so would be available to the Agency. Therefore,
EPA has not made deposition of new microorganisms in a culture collection
a requirement in this final rule.

2. Inventory listing

Comments:

Eleven commenters (#4, 8, 18, 23, 26, 28, 30, 31, 33, 34, 35) had
concerns about Inventory listing. While ten of the commenters requested
clarifications or modifications to EPA's proposed approach, one
commenter (#31) felt that EPA should not finalize the Inventory
portion of the proposal, but should hold public meetings to develop
an appropriate Inventory nomenclature scheme for microorganisms.

Four commenters (#8, 18, 30, 35) asked that EPA clarify the type
of taxonomic designation to be used for Inventory listing. Five
commenters (#4, 8, 18, 30, 35) said that it was necessary for EPA
to indicate how revisions to taxonomy would be accommodated on the
Inventory. Two commenters (#34, 35) suggested that EPA consider
Inventory listings for microorganisms to be inclusive of any taxa
listed under historical or future revisions of the genera, as long
as the microorganism lineage can be appropriately documented.

Three commenters (#28, 33, 35) indicated that EPA should clarify
what is "new" under TSCA by limiting Inventory listing for a microorganism
to the genus and species of the recipient microorganism and a description
of the introduced genetic material. Four commenters (#28, 33, 34,
35) specifically opposed the proposal to use designations to the
strain level.

Six commenters (#23, 26, 28, 33, 34, 35) encouraged EPA to adopt
a policy that would not consider "new" under TSCA minor changes
made during strain improvement of microorganisms already listed
on the Inventory. Five commenters (#26, 28, 33, 34, 35) suggested
that this could be accomplished by focussing on intergeneric expression
of new phenotypic traits. One commenter (#23) suggested that EPA
focus on traits of an organism likely to pose risk.

EPA response:

On the basis of two considerations, EPA believes it is prudent
to defer a fuller development of Inventory listing for microorganisms.
First, EPA recognizes that the method of listing on the Inventory
is closely tied to the interpretation of what constitutes a new
microorganism. Second, EPA agrees that Inventory listing for intergeneric
microorganisms is more complex than listing for most traditional
chemicals. As indicated above in Unit II.D., EPA plans to address
modifications and clarifications to its intergeneric interpretation
in the future. Future modifications to the intergeneric interpretation
could also affect how microorganisms are listed on the Inventory.
A subcommittee of EPA's Biotechnology Science Advisory Committee
(BSAC), which met on July 22, 1991, when questioned on EPA's proposed
approach to Inventory listing for microorganisms, suggested that
EPA continue on a case-by-case basis and gain additional experience
before finalizing its requirements for Inventory listing. Pending
further consideration, EPA will continue to use a case-by-case approach
to Inventory listing for new microorganisms.

EPA believes that the preamble discussion of Inventory listing
in the proposed rule (59 FR 45551-52 (September 1, 1994)), can serve
as guidance to persons who are preparing MCAN submissions and need
to address the microorganism identification requirements in 725.12.
Additionally, in Unit II.D. of this document, EPA has provided some
clarification regarding use of taxonomy. As always, submitters may
consult with EPA concerning clarification of their reporting obligations
for specific microorganisms.

3. "Grandfather" period

Comments:

Three commenters (#25, 28, 33) requested that EPA provide a "grandfather"
period by opening up the Inventory for one year after the final
rule is published to allow products currently in commerce to be
listed. One commenter (#39) requested that intergeneric products
currently in commerce be automatically placed on the Inventory.

EPA response:

EPA disagrees with the commenters who believe that a "grandfather"
period is necessary. Since the publication of the 1986 Policy Statement
in June 1986, EPA has required PMN reporting for general commercial
use of intergeneric microorganisms subject to TSCA. Although different
scopes of oversight have been discussed in the intervening years,
the Policy Statement has remained in effect all that time. Therefore,
EPA believes that the public has had sufficient notice of its program
and that intergeneric microorganisms currently in commerce and being
used for TSCA purposes should have been reported to EPA.

4. Microorganisms currently listed on the Inventory

Comments:

Two commenters (#4, 24) discussed concerns about the 192 microorganisms
currently listed on the Inventory by genus and species only. One
commenter (#24) stated that there was no information about the phenotypic
characteristics of these strains or about any introduced DNA. This
commenter noted that "[w]ithout clarification of what specifically
appears on the list, every intergeneric strain would be subject
to regulation by default." With regard to the Inventory, the other
commenter (#4) stated "[p]resumably these are listed under species
names available for biosafety regulators at [a] certain time period."
This commenter gave specific examples of changes in taxonomic designation
that have occurred for some of the microorganisms listed on the
Inventory and suggested that EPA devise a method for keeping up
with changes in taxonomy.

EPA response:

EPA wishes to clarify its position on microorganisms currently
listed on the Inventory. These microorganisms can be divided into
two groups: (1) those reported to the initial Inventory in the late
1970s, and (2) those listed after EPA's review of PMNs and receipt
of Notices of Commencement to manufacture. EPA has no concerns about
the Inventory status of the second group, because these microorganisms
were all reported to EPA under the 1986 Policy Statement and therefore
are intergeneric and are appropriately explicitly listed. The listings
for these microorganisms include descriptive information to specifically
identify them beyond the genus and species designations.

Such is not the case for the first group, the 192 microorganisms
reported to the initial Inventory. As one commenter noted, these
microorganisms are primarily listed by genus and species. EPA believes
that most of these microorganisms are naturally occurring or have
been modified by methods that do not involve the introduction of
genetic material from an organism in another genus and thus in many
cases would not need to be explicitly listed. To confirm this assumption,
EPA requested that persons manufacturing or importing any of the
192 microorganisms inform EPA of their status during the public
comment period for the proposed rule. No comments were received
on the status of these microorganisms. EPA wishes to ensure that
all microorganisms which are explicitly listed on the Inventory
are intergeneric and are described in a consistent manner. Based
on the absence of additional information, EPA has concluded that
the 192 microorganisms are not intergeneric and, thus, are automatically
on the Inventory under 725.8(b). EPA will remove the explicit listings
from the Inventory in a separate action under the authority of TSCA
8(b).

With regard to the concerns about changes in taxonomy, as discussed
above, EPA will address its approach to Inventory listing in more
detail when it develops modifications to its intergeneric interpretation.
In the interim, EPA has indicated how it will address taxonomy issues
in Unit II.D. of this document.

C. CONFIDENTIAL BUSINESS INFORMATION

EPA proposed to require upfront substantiation of confidential
business information (CBI) claims in all submissions for general
commercial uses of microorganisms: anyone submitting a MCAN, a TME,
Tier I certification, or a Tier II exemption request would be required
to substantiate CBI claims at the time of submission. With respect
to upfront substantiation for TERAs, EPA proposed two options and
asked for public comments on both. Option 1 would require upfront
substantiation of all CBI claims in TERAs. Option 2 would not require
upfront substantiation of CBI claims in TERAs, but would only require
CBI substantiation after EPA received a Freedom of Information (FOIA)
request.

Eight commenters (#8, 18, 23, 25, 28, 31, 33, 35) opposed upfront
substantiation of CBI claims in microorganism submissions. Three
of these commenters (#8, 18, 25) specifically opposed upfront substantiation
of CBI claims in submissions for R&D purposes only, indicating
that the requirement was too burdensome for R&D because it was
important to have proprietary protection for R&D activities.
The other five commenters (#23, 28, 31, 33, 35) opposed upfront
substantiation of CBI claims for both R&D and general commercial
use submissions, arguing that EPA's approach to substantiation of
CBI claims in microorganism submissions should not differ from EPA's
approach to substantiation of CBI claims traditional chemical submissions.

EPA response:

In setting its requirements for CBI substantiation, EPA must balance
the competing needs of opening the review of submissions for microorganisms
to public scrutiny and participation while protecting legitimate
CBI claims. EPA recognizes that industry believes that the requirement
for upfront substantiation of CBI claims imposes a greater burden
on R&D submitters than is necessary and that proprietary protection
for R&D is essential. In the past several years, submitters
of voluntary PMNs for field tests of new microorganisms have claimed
very little, if any, CBI. These submitters have indicated to EPA
that they are anxious to have an open process, so that the public
will gain an understanding of their work and find the microbial
products acceptable when they finally reach the market. Based on
this experience and considering the comments received, EPA has decided
not to require upfront substantiation of CBI claims in TERAs. However,
if, in the future, EPA finds that CBI claims have increased in TERAs
and that insufficient information is available to the public during
the 60-day TERA review period, EPA may find it necessary to reconsider
this decision. The regulatory text at 725.94(a)(2) has been revised
to read as follows:

(2) TERA requirements. Any person who submits a TERA, should strictly
limit confidentiality claims to that information which is confidential
and proprietary to the business. If any information in such a submission
is claimed as confidential business information, the submitter must
have available for each of those claims, and agree to furnish to
EPA upon request, written answers to the questions in paragraphs
(d) and (e) of this section.

In the case of general commercial use submissions, EPA believes
that the upfront substantiation requirement for CBI claims will
impose little burden on submitters of MCANs, TMEs, Tier I certifications,
and Tier II exemption requests. Because submitters of MCANs, TMEs,
Tier I certifications, and Tier II exemption requests are ready
to put their products on the market, they should be able to justify
why it will continue to be necessary to keep certain information
confidential. In addition, given the shorter review period for TMEs
and Tier II exemption requests, sufficient information may not be
made available to the public if upfront substantiation of CBI claims
is not required.

D. TSCA SECTION 8(e)

In the proposal, EPA reminded persons manufacturing, importing,
processing, or distributing in commerce any TSCA-covered microorganisms
of the responsibility under TSCA 8(e) to immediately report to EPA
any information the person obtains which reasonably supports the
conclusion that such microorganisms present a substantial risk of
injury to health or the environment.

Comments:

EPA received four comments (#8, 25, 28, 33) regarding TSCA 8(e)
reporting requirements. All four commenters indicated that while
the 8(e) reporting requirements that were originally developed for
chemicals could be applied to microorganisms, they believed that
EPA should develop clear guidance specifically for microorganisms.
Two commenters (#28, 33) asked that EPA clarify "that products not
subject to 5 notification are still subject to 8(e) requirements."

EPA response:

TSCA 8(e) requires all manufacturers, processors, and distributors
of a chemical substance or mixture subject to TSCA to notify EPA
immediately of any new information which reasonably supports the
conclusion that such substance or mixture presents a substantial
risk of injury to health or the environment. This requirement applies
to all chemical substances and mixtures that are subject to TSCA,
regardless of whether they are subject to TSCA 5 notification. Therefore,
all microorganisms and microbial mixtures that are subject to TSCA,
including naturally occurring and intrageneric microorganisms, as
well as intergeneric microorganisms are subject to TSCA 8(e) reporting
requirements. The requirements also extend to those involved in
research and development activities with microorganisms and microbial
mixtures subject to TSCA.

EPA does not agree with commenters who believe that specific guidance
for 8(e) reporting of microorganisms is necessary. While EPA recognizes
the biotechnology industry's desire for explicit guidance, given
the broad nature of 8(e) and the diverse types of studies and other
information that can fall within the overall scope of the required
reporting, it is unlikely that EPA would be able to provide fully
explicit reporting requirements that would cover every hypothetical
circumstance involving the diversity of microorganisms and uses
potentially subject to TSCA.

Over the years, EPA has spent considerable effort to prepare and
disseminate interpretive guidance for 8(e) reporting for traditional
chemicals. EPA believes that this guidance can be applied to microorganisms.
While the specifics may be different for microorganisms, the decision-making
process should be similar. In deciding whether information is "substantial
risk" information, a person must consider (1) the seriousness of
the adverse effect, and (2) the fact or probability of the effect's
occurrence. In determining 8(e) reportability, these two criteria
should be weighted differently depending upon the seriousness of
the effect or the extent of the exposure. The decision-making process
for 8(e) reportability should focus primarily on whether the hazard
or exposure information offers reasonable support for a conclusion
of substantial risk, but should not focus at all on whether the
information is conclusive regarding risk. Determining whether reasonable
support exists for "substantial risk" is not synonymous with the
determination of an "unreasonable risk" as that term is used in
5 of TSCA. Guidance regarding the 8(e) reporting requirements may
be obtained from the TSCA Assistance Information Service at (202)
554-1404; TTD (202) 554-0551; on line service modem (202) 554-5063.

E. ANTIBIOTIC RESISTANCE MARKERS

Although EPA only discussed the use of antibiotic resistance genes
as markers as part of its proposal for exempting two specific microorganisms
from TERA reporting (see Unit IV.F.), EPA also received comments
addressing more generally the use of antibiotic resistance markers.

Comments:

EPA received 11 comments (#2, 5, 6, 8, 12, 14, 15, 16, 20, 24,
27) generally addressing the use of antibiotic resistance markers.
One commenter (#8) supported the use of antibiotic resistance genes
as selectable markers for microorganisms. Six commenters (#2, 6,
12, 14, 15, 20) indicated that antibiotic resistance genes should
not be used with intergeneric microorganisms that would be released
into the environment. One commenter (#12) indicated that EPA should
also consider limiting the commercial use of microorganisms containing
certain endogenous antibiotic resistance markers.

Three commenters (#5, 12, 27) specifically opposed the TERA exemptions
for Rhizobium and Bradyrhizobium strains at 725.239 that allowed
the use of antibiotic resistance markers from any source. Three
commenters (#12, 16, 27) more generally opposed exemptions for microorganisms
containing antibiotic resistance markers.

Two commenters (#8, 24) suggested that EPA develop a list of antibiotic
resistance markers that should not be used. One commenter (#8) indicated
that other types of markers should be exempt from TSCA as an incentive
for their use. One commenter (#15) suggested that EPA convene another
meeting of its BSAC to consider the issue of antibiotic resistance
markers. Two commenters (#16, 27) indicated that there were other
types of markers which were more acceptable than antibiotic resistance
markers. One commenter (#12) suggested that EPA provide a list of
other markers to use.

EPA response:

EPA did not discuss a general policy for addressing use of antibiotic
resistance genes as markers as part of its proposed rule. Use of
antibiotic resistance markers was only discussed as part of the
exemption from TERA reporting proposed for certain modified strains
of Bradyrhizobium japonicum and Rhizobium meliloti. EPA has responded
to comments on the TERA exemption in Unit IV.F. above, and has revised
the regulatory text at 725.239 regarding the use of antibiotic resistance
markers in Bradyrhizobium japonicum and Rhizobium meliloti in response
to specific comments.

EPA recognizes that many factors affect the health and safety
evaluation of use of antibiotic resistance markers. The use of antibiotic
resistance markers is a complicated issue which has ramifications
for products beyond the scope of TSCA. Because of the complexity
of the issues,

EPA will not develop a general policy on the use of antibiotic
resistance markers, but will continue to evaluate their use in specific
microorganisms on a case-by-case basis as submissions are received.
EPA plans to pursue this issue in consultation with other Federal
agencies who have an interest in this issue.

F. STATE COORDINATION

The proposed rule discussed EPA's procedures under the 1986 Policy
Statement for coordinating reviews and sharing scientific information
with appropriate State and local authorities. EPA proposed to require
persons preparing TERA submissions for R&D activities involving
release to the environment to provide evidence in the submission
of having notified appropriate State authorities.

Comments:

EPA received five comments (#8, 18, 31, 33, 37) on its proposal
for coordination with appropriate state authorities. One commenter
(#37) supported EPA's proposed requirement for State coordination.
Three commenters (#8, 18, 31) opposed the requirement. Two of the
three commenters believed the requirement was a disincentive for
R&D, but that if applied, it should only be applied to environmental
R&D. The other commenter (#31) stated that the requirement should
be deleted, because the terms "appropriate Federal and State authorities"
are not defined and "this requirement is impermissibly vague and
ambiguous." One commenter (#33) expressed concern about adequate
protection of CBI during such activities.

EPA response:

Based on comments as well as its experience, EPA has revised 725.238(b)(3)(ii)
and 725.255(e)(1)(vi) which required submitters to include evidence
that State authorities have been notified in the TERA exemption
certification and TERA submission, respectively. The provision has
been revised to read, "If State and/or local authorities have been
notified of the activity, evidence of notification." EPA's reasons
for the change are discussed below.

EPA has developed comprehensive procedures to coordinate reviews
of submissions and to share scientific information with appropriate
State and local authorities to the fullest extent possible without
violating TSCA CBI requirements. In all circumstances, EPA adheres
strictly to its procedures for handling TSCA confidential business
information (CBI). Because EPA maintains a public docket, nonconfidential
versions of many documents must be prepared and EPA can use these
nonconfidential documents to share information with interested parties,
including State and local authorities.

Under EPA's current procedures for review of field tests under
the 1986 Policy Statement, an EPA review coordinator contacts by
telephone the appropriate regulatory agencies in the State(s) where
the test will be conducted to inform them of the submission. If
requested, a nonconfidential copy of the submission is mailed to
the State contact. Nonconfidential reports, assessments and public
comments added to the Public Docket are routinely made available
to State personnel upon request. Comments and concerns raised by
the State(s) are given careful attention during the review process.
State personnel receive a copy of any document which addresses the
conditions under which the field test can be performed.

Some states have requirements that State authorities be given copies
of information that is sent to Federal authorities for field tests
of certain designated microorganisms. Only one requires a separate
review process. EPA believes that it is important to involve appropriate
State and local authorities in the review of field tests, because
these tests are occurring in their jurisdictions and because it
is not possible for EPA personnel to visit every field test site.
If any problems result from the field test, EPA would coordinate
with State and local personnel. Therefore, EPA will continue to
encourage submitters to advise state and local authorities of their
field test plans, although this will not be a requirement. In cases
where submitters do inform state and local authorities of their
test plans, EPA believes that it is appropriate to require that
submitters inform EPA of this notification as part of their TERA
submissions and TERA exemption certifications.

G. REGULATORY DECISION

During the review of a submission for a microorganism, EPA may
reach one of three decisions, based on a balancing of the risks
and benefits presented by the microorganism: (1) The available information
does not indicate that the risks are unreasonable; (2) there is
sufficient information to determine that the risks are unreasonable;
or (3) there is insufficient information to make a reasoned evaluation
of risk, and the substance may present an unreasonable risk or the
microorganism will be produced in substantial quantities, and the
microorganism may reasonably be anticipated to enter the environment,
or there may be significant or substantial human or environmental
exposure to the microorganism. These three potential decisions were
discussed briefly in the proposal.

EPA should establish in the regulation itself what standards they
will use in determining what is a 'significant or substantial human
or environmental exposure.' This will ensure that manufacturers
address Agency concerns prior to submission and are not 'surprised'
by an EPA decision of 'unreasonable risk.' For those submissions
where there is insufficient information to determine that the risks
will not be unreasonable, EPA should document in detail its concerns
to the manufacturer. This will aid the manufacturer in reaching
a decision as to whether to proceed with the planned commercialization.

A third commenter (#39) stated:

It is essential for effective management of commercial R&D
that a company be able to make reasonably accurate predictions of
whether or not a future chemical or microbial product will or will
not be allowed by EPA. ... These predictions of regulatory risk
cannot be made unless EPA clearly states the evaluation criteria
that will be used to approve each application level. We therefore
request that EPA clearly lay out the review criteria and risk evaluation
procedures for each level. For example, EPA might wish to consider
as a model the Structure Activity Relationship Criteria that EPA
currently applies to assessment of new chemicals. ... we recommend
that EPA conduct a separate rulemaking proceeding in order to establish
such criteria.

EPA response:

As noted above, during the review of a submission, EPA may make
one of the three regulatory decisions. Because this decision is
made in a case-by-case analysis based on a balancing of the risks
and benefits presented by the specific microorganism under review,
EPA does not believe that it is possible a priori to develop "one
size fits all" standards for this determination.

The term "unreasonable risk" is not defined in TSCA. However,
TSCA 6(c) lists considerations for determining whether a substance
presents an unreasonable risk for purposes of promulgating regulations
under TSCA 6. The considerations include the effects of the substance
on human health and on the environment and the magnitude of exposure
to the substance, the benefits of the substance for various uses,
the availability of substitutes for such uses, and the reasonably
ascertainable economic consequences of the potential regulatory
action. A review of the legislative history of TSCA shows that the
House Report (H.R. Rep. 94-1341, 94th Cong., 2d Sess, at 13-15,
32) states that the unreasonable risk standard cannot be defined
in precise terms but, instead, requires exercise of judgment by
the decision maker. The House Report describes the finding of unreasonable
risk as involving a balancing of the probability that harm will
occur, and the magnitude and severity (potential consequences) of
that harm, against the effects (social and economic) of proposed
action on society.

According to the House Report, these evaluations of harm often
must be based on considerations of "scientific theories, projections
of trends from currently available data, modeling using reasonable
assumptions and extrapolations from limited data." (House Report,
at 32). The unreasonable risk standard recognizes that, as a practical
matter, all scientific evidence is uncertain to some degree and
that EPA can consider such factors as the strength of the evidence
on toxicity, the nature of the effects that may occur (e.g., death
vs. reversible effects), and the likely numbers of individuals exposed
and the levels of exposure. The House Report points out that the
unreasonable risk standard is flexible enough to allow EPA to calibrate
the stringency of a regulatory measure to the levels of risk and
benefits. Therefore, if EPA determines that there is insufficient
information to permit a reasoned evaluation of the health and environmental
effects of a microorganism and either the microorganism may pose
a risk to human health or the environment or the microorganism will
be produced in substantial quantities, and the microorganism may
reasonably be anticipated to enter the environment, or there may
be significant or substantial human or environmental exposure to
the microorganism, TSCA 5(e) allows EPA to enter into a consent
order with the submitter allowing the submitter to manufacture the
microorganism under restricted conditions and requiring the collection
of data to better characterize the microorganism. If EPA determines
that there is a reasonable basis to conclude that a microorganism
will present an unreasonable risk, TSCA 5(f) allows EPA to issue
an injunction to prohibit the manufacture, processing, or distribution
in commerce of the microorganism.

Because EPA encourages prenotice consultations and keeps a public
docket for each 5 notice, EPA does not believe that manufacturers
filing microorganism submissions should be "surprised" by decisions
made under TSCA 5. For most of the notices that EPA has reviewed
for microorganisms used as intermediates to produce specialty chemicals
such as enzymes, EPA has concluded that the available information
does not indicate that the risks are unreasonable. Therefore, the
submitters have been free to begin manufacture of the microorganisms
after the expiration of the review period. In fact, many of these
microorganisms have been proposed for the tiered exemption discussed
above in Unit III.C. To date, EPA has not used TSCA 5(f) to regulate
microorganisms.

The greatest uncertainty has occurred with reviews of proposed
field tests of new microorganisms. In these cases, where EPA did
not identify significant concerns based on the available data, including
greenhouse or other contained studies, it decided to allow the field
tests to proceed. When it was necessary, in order to develop the
information EPA needed to reduce uncertainty about microorganism
behavior such as survival and dissemination, and when this information
could only be obtained from field testing, EPA has used its authority
under TSCA 5(e) to negotiate consent orders with submitters to allow
limited field tests. Thus, in anticipation of possible commercialization,
the 5(e) Consent Order has enabled the submitter to proceed with
product development while providing EPA with additional data needed
to reduce uncertainty. As questions were answered, EPA reduced the
requirements it imposed on subsequent field tests.

In general, as EPA has gained additional experience reviewing
both sequential field tests with microorganisms and commercial uses
of fermentation microorganisms, it has been able to reduce requirements
where uncertainty has been reduced. This has been true as EPA has
worked with specific submitters and as EPA has tried to generalize
that experience through the development of flexible exemptions which
can be expanded. EPA expects to continue with this approach in the
future.

H. ECONOMIC IMPACT

EPA prepared a Regulatory Impact Analysis (RIA) assessing the costs,
benefits, and associated impacts of regulating new microorganisms
under TSCA as set forth in the proposed rule. Based on the analysis
presented in the RIA, EPA's preliminary findings were that the proposed
rule should not adversely affect either innovation or international
competitiveness in biotechnology. EPA requested comments on the
economic impacts associated with the proposed rule and made the
RIA available to the public as part of the rulemaking docket. EPA
has revised the RIA to reflect changes made to the proposed rule.
The RIA which supports the final rule is included in the rulemaking
docket.

1. Impacts on innovation

Comments:

EPA received comments regarding the potential for the rule as proposed
to hinder innovative research. One commenter asserts that "the rule
will potentially enable only high value microorganisms to be commercialized,"
while "microorganisms of limited use, both temporally and spatially,
are unlikely to be developed" (#8). Another echoed this position,
stating that "only those experiments likely to lead to a high-value
product will be conducted and only those institutions with sufficient
capital will be able to compete" (#24). A more general statement
made by an additional commenter expressed concern in connection
with the potential impacts on R&D activity resulting from "early
stage regulatory oversight," and included an example of potential
impacts associated with "multiple regulatory jurisdictions" in the
area of bioremediation (#33).

EPA response:

EPA is sensitive to the concerns expressed regarding the impacts
of the rule on innovation and on the competitive structure of the
industry. In its RIA, the Agency conducted an investigation into
the potential impacts of the costs associated with reporting on
product development costs and schedules (see RIA, App. F). This
analysis demonstrated that a wide range of impacts could be realized,
but that such impacts were highly dependent on project characteristics
and review duration. In general, the results suggest that larger
scale, higher return projects could indeed be less likely to experience
substantial impacts; however, smaller scale projects modeled also
exhibited financial viability when regulatory burdens were considered
as part of the product development process. Importantly, review
duration (termed "delays" in the analysis) played a significant
role in the severity of impact sustained by any particular project.

Because smaller scale projects of limited use would most likely
be exempt (e.g., organisms used exclusively for research purposes)
or involve a relatively limited set of use and exposure scenarios,
delays due to regulatory review would be expected to be non-existent
or minimal; thus, the impacts noted above by commenters could be
mitigated in many situations of the type described. EPA also emphasizes
that a number of burden-reducing provisions have been included in
its final rule: the TERA process, which streamlines field trials
for R&D; the TERA exemption and tiered exemption provisions,
which reduce data requirements in connection with more familiar
microbiological products; and the exemption for laboratory research
conducted in contained structures.

Though EPA requested data regarding impacts and product development
issues in the preamble to the proposed rule (59 FR 45557 (September
1, 1994)), no such data were submitted. Neither were specific comments
received pertaining to the analysis or cash-flow models presented
in the RIA. In the absence of such comments, and in light of the
flexibility incorporated into the final rule, the Agency has determined
that innovative impacts of the rule should not hinder the industry
fr om pursuing a full range of product applications.

With respect to the specific case of multiple regulatory jurisdictions
in the area of bioremediation, it was not made clear by the commenter
why these regulations promulgated under TSCA would limit the ability
of firms to conduct performance testing necessary for remediation
technologies, as required under RCRA and CERCLA. Assuming that such
an application for an intergeneric microorganism subject to TSCA
was under development, the detailed information necessary to establish
the performance of the product would likely provide a good deal
of the informational requirements of the TERA (e.g., see RIA, App.
D, Table D-3; and 725.255, "Information to be Included in the TERA").
Thus, while the reporting requirements of these rules could introduce
some additional costs into the product development process, such
incremental costs are likely to be a small component of overall
development costs for this type of product, that is, a large portion
of TSCA-related regulatory costs may be incurred in any event as
part of the product development and CERCLA review process. Therefore,
EPA does not believe, as a general rule, that TSCA oversight should
add significantly to existing resource requirements necessary to
develop bioremediation products. Unfortunately, data regarding such
development costs, particularly costs attributable to the type of
performance testing alluded to by the commenter, were not provided.

2. Impacts on international competitiveness

Comments:

A number of commenters expressed concern regarding the potential
for the rule to adversely affect the competitive position of U.S.
biotechnology firms in world markets. For example, one commenter
claimed that additional regulatory burdens would be likely to have
a negative impact on research funding, resulting in an erosion of
the competitive position of the U.S. (#24) while another recommended
the regulations be evaluated in comparison to other developed countries
having significant biotechnology development resources (#8).

EPA response:

EPA recognizes that regulatory initiatives may have implications
for U.S. based firms facing competition in the global marketplace.
In its RIA, the Agency presented a thorough discussion of regulatory
initiatives in key industrialized nations and found that, overall,
similarities among the nations' regulatory approaches were more
striking than the differences (see RIA, Executive Summary). In light
of this, and the fact that any incremental regulatory burdens imposed
by the rule are estimated to be modest and associated with a minority
of cases (that is, most regulated firms should find regulatory burdens
somewhat reduced due to exemption provisions incorporated into the
rule), EPA does not anticipate significant impacts on international
competitiveness related to this action.

It should be noted that no data or evidence were submitted by commenters
supporting the assertion that the rule could result in erosion of
the competitive position of U.S. firms. Presumably, any adverse
impacts associated with TSCA regulation of products of biotechnology
would be evident under current regulatory policy, upon which the
final rule is based. Because incremental impacts associated with
this rule are expected to only marginally increase impacts realized
under current policy, EPA must conclude that commenters' concerns
are largely speculative in nature, and that prevailing conditions
most likely also reflect post-promulgation circumstances.

3. Cost estimates

Comments:

One commenter (#24) stated their view that EPA had significantly
underestimated the costs of compliance with the rules. The commenter
claimed that the EPA review process was similar to the filing of
a patent application, and that administrative costs would range
from $20,000 to $45,000 per application.

EPA Response:

In its RIA which accompanied the proposed rule, EPA presented
detailed tabular summaries ("spreadsheets") of the Agency's estimates
of incremental costs associated with the preparation and filing
of two proposed reporting vehicles: the TSCA Experimental Release
Application (TERA) and the Microbial Commercial Activities Notification
(MCAN) (see RIA, App. D). The cost ranges estimated for the TERA
and MCAN were $5,330-$54,425 and $6,931-$32,772, respectively. Though
not specifically noted in the comment, EPA assumes that these reporting
vehicles were the items of primary interest to the commenter.

While the commenter's estimated range of $20,000 to $45,000 per
application exceeds the Agency estimates considerably at the low-end
of the EPA ranges, the commenter's claim that the Agency has "significantly
underestimated" the costs of the rule is not supported by these
figures. Clearly, the upper end of the EPA range is comparable to
the range presented by the commenter. EPA recognizes that certain
information required to be submitted with the TERA or MCAN would
likely not be necessary when filing a patent application, such as
information regarding monitoring, confinement, mitigation, and emergency
termination procedures for a field experiment. However, EPA estimated
that this information represents less than one-third of the overall
TERA filing cost at the high-end, and that a major portion of the
burden associated with compiling this type of information is necessary
to ensure an effective experiment, regardless of whether the TERA
is filed or not. Therefore, while it would be expected that costs
incurred in connection with TSCA oversight could often exceed costs
incurred for patent applications, it is not obvious that, based
on the comparison suggested by the commenter, the Agency's estimates
significantly understate such costs routinely.

Further, it is not known to what type of microorganism the cost
estimate provided by the commenter applies; as shown by the cost
spreadsheets in the RIA, costs to prepare for TSCA review are expected
to vary significantly based on the complexity and uncertainty associated
with a particular microbiological product. Without more specific
information describing the circumstances surrounding the patent
and the extent of any documentation prepared for the application
(e.g., written description of design, drawings), it is difficult
for the Agency to determine how best to integrate the commenter's
statement into the Agency's analysis. For the reasons explained
above, and absent any specific criticisms of the RIA methodology
or data sources, EPA concludes that the cost estimates presented
in the RIA provide a representative assessment of the economic impacts
of the final rule.

VI. APPENDIX

A. PUBLIC COMMENTERS

Comments on the proposed TSCA biotechnology rule were received
from the following public commenters who are listed by the number
assigned to them in the public docket. With the exception of the
letters which were solely requests for extension of the public comment
period (#1, 3, and 10) and one duplicate comment (#19), all other
comments are referred to in this document by the number indicated
below:

1. Genencor (extension request only)

2. Citizens for Accountable Genetic Engineering (CAGE)

3. DuPont (extension request only)

4. Alexander Mazanov

5. Science Mediation Service

6. Farm Verified Organic, Inc.

7. Association of American Medical Colleges (AAMC)

8. American Society for Microbiology (ASM)

9. Earlene K. Busch

10. Chemical Manufacturers Association (extension request only)

11. Cooley Godward Castro Huddleson & Tatum

12. Environmental Defense Fund (EDF)

13. Mycogen Corporation

14. Organic Foods Production Association of North America

15. Union of Concerned Scientists (UCS)

16. U.S. EPA Region II

17. Michael A. Cole, University of Illinois at Urbana Champaign

18. American Phytopathological Society (APS)

19. Farm Verified Organic, Inc. (duplicate of #6)

20. F.U.T.U.R.E. Organics, Inc.

21. United States Biochemical (USB)

22. Council on Governmental Relations (COGR)

23. D. Glass Associates, Inc.

24. Society for Industrial Microbiology (SIM)

25. Monsanto

26. Energy BioSystems Corporation (EBC)

27. Project to Label Gene-Altered Food

28. Genencor

29. University of Arizona, IBC

30. Minnesota Department of Agriculture

31. DuPont

32. Pioneer Hi-Bred International, Inc.

33. Biotechnology Industry Organization (BIO)

34. Enzyme Technical Association (ETA)

35. Novo Nordisk

36. American Seed Trade Association, Inc. (ASTA)

37. Wisconsin Dept. of Agriculture, Trade & Consumer Protection

38. ChromaXome

39. Life Technologies (LTI)

40. Asgrow

B. REFERENCES

The following books, articles, reports and telephone logs were
used in preparing this document and were cited in this document
by the number indicated below.

1A. Memorandum from Elizabeth Milewski, Ph.D., Special Assistant
for Biotechnology, to Ron Evans, Chief, Regulatory Development Program
Branch, re "Issues Associated with the Use of Pathogenicity As A
Criterion For Describing Microorganisms for Regulatory Purposes"
(March 15, 1988).